SUMMARY
SEBI’s regulations disallow promoters and promoter entities to hold more than 75% of the company shares, but in Justdial’s case it is 76.98%
To comply with the regulatory requirements, Reliance will sell 2% of its 66.95% stake in the open market
Reliance will complete the sale of the shares in eight trading days, the Justdial parent told BSE
Reliance Retail Ventures Limited (RRVL), a subsidiary of Reliance Industries, will be selling 16,86,119 shares of Justdial in the open market, constituting 2% of the total paid-up equity share capital of the company, Just Dial Ltd told stock exchanges in a filing.
Beginning December 21, 2022, the promoter will complete the sale of the shares in eight trading days, the Justdial parent told BSE.
This comes on the heels of SEBI’s regulations that disallow promoters and promoter entities to hold more than 75% of the company shares. Incidentally, promoter (RRVL) and promoter group entities together hold a 76.98% stake in Justdial.
To comply with the regulatory requirements, Reliance will sell 2% of its stake in the open market. Following the announcement, the share of Justdial opened at 2% lower than the previous close.
Reliance Retail currently holds 66.95% of Justdial, making it the company’s promoter. In September 2022, Justdial issued 2.12 Cr equity shares of INR 10 each at a price of INR 1022.25 per share to RRVL in a preferential issue. This represented 25.35% of Justdial’s post-preferential issue paid-up share capital.
Previously, in July, Reliance had purchased 1.31 Cr equity shares of INR 10 each at a price of INR 1020 per share from Justdial’s founder, CEO and MD, VSS Mani, through the block window facility. This represented a 15.63% stake in Justdial’s post-preferential issue paid-up equity share capital. As a result of these transactions, RRVL holds a total of 40.95% of Justdial’s equity shares.
RRVL then made a public announcement to the public shareholders of Justdial to acquire up to 26% of equity share as per market regulator SEBI’s acquisition guidelines, eventually owning a total of 66.95% in Justdial.
While Mani continued to serve as Justdial’s CEO and MD, the company’s group president, V Krishnan also retained his role.
In Q2 FY23, the Mumbai-based hyperlocal search engine recorded a net profit of INR 52.2 Cr, a quarter-on-quarter (QoQ) rise of 207.85% from the loss of INR 48.4 Cr in Q1 FY23. The company’s operating revenue in Q2 FY23 was INR 205.3 Cr – a QoQ rise of only 10.61% from INR 185.6 Cr in Q1 FY23.
Justdial has a large database containing around 31.7 Mn listings, and it receives an average of 132 Mn unique users per quarter (as of September 2022). In the second quarter of the fiscal year 2023, Justdial reported a total incoming traffic of 156.5 Mn across its mobile website and app (84.5%), desktop website (11.6%), and voice calls (3.9%).
