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What Reliance - industries- Just Dial mean for investors!

Reliance Retail may utilize Just Dial’s 30 million business listings to drive digitization of companies specified Reliance Retail’s platforms could ultimately become a large-scale aggregator platform providing myriad products and services to end consumers, Kotak Institutional Equities said
Shares of Just Dial Ltd declined by 4% in early deals on Monday on the National stock market after it said Reliance Retail Ventures Ltd would acquire a controlling stake (of quite 40%) within the company. Reliance Industries owns 85% stake in Reliance Retail.
As a part of the deal, Reliance Retail would make an open offer to accumulate up to 26% stake in only Dial for about ₹1022 per share. this is often 5% less than Just Dial’s price on Friday. counting on the subscription of the open offer, Reliance Retail would find yourself owning about 41-67% of Just Dial after the transaction is completed.
Commenting on the event , analysts from Kotak Institutional Equities said, “Change in ownership may boost Just Dial’s transformation from a clear vanilla listings platform to a comprehensive discovery and transactions platform." Further, Just Dial would be ready to drive growth and expansion with the capital infused by Reliance Retail. the very fact that VSS Mani will continue as director and chief military officer of Just Dial should come as some relief to its investors.
“We believe Reliance Retail will utilize Just Dial’s 30 million business listings to drive digitization of those businesses such Reliance Retail’s platforms could ultimately become a large-scale aggregator platform providing myriad products and services to finish consumers," points out Kotak.
Analysts from J.P. Morgan India Pvt. Ltd said during a report on 18 July, “The key attraction for Reliance Retail would be access to only Dial’s database of merchant listings/retailers and therefore the potential to proportion the JD app and JD Mart Platforms and add on to the Jio Mart app and expand the scope of services and offerings across B2B and B2C." The broker also added, “We would wait to ascertain how the acquisition would expand JioMart’s footprint and if JD Mart is eventually integrated with the JioMart app, thereby fixing place the building blocks of a ‘Super App’."
ICICI Securities Ltd’s analysts reckon, “The incontrovertible fact that Just Dial ‘complements’ (versus competes) broader RIL’s portfolio is reassuring . We see loose similarities with RJio’s/ L&T’s acquisition of Saavn/ Mindtree. It remains to be seen how the dynamics of a ‘potential’ amalgamation with RIL over future plays out."
As far because the contours of the deal go, Reliance Retail would acquire 25.3% stake in only Dial through a preferential allotment and another 15.6% stake from VSS Mani. This triggers a compulsory open offer to accumulate up to 26% stake. the ultimate acquisition cost for 67% stake works bent around ₹5720 crore.
Meanwhile, whilst the open asking price is at a reduction to Friday’s closing, it’s worth noting that shares of Just Dial have meaningfully outperformed the broader Nifty 500 index within the past one year. The Just Dial stock is the maximum amount as 67% above its pre-covid highs seen in January 2020.

 

 

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