Just Dial IPO Review & Recommendations

Just Dial IPO Review by Dilip Davda (Apply)

[Dilip Davda]  

It appears that as promoters have to honour the "Safety Net" they too have opted for some dilution of stake to keep some buffer with them so that in the event of "Safety Net" clause application, it can pay from the buffer created and hence the issue size has more than doubles of its original plans and even higher than the CRISIL's consideration.

On the performance front, the company has posted an average EPS of Rs. 6.05 (on consolidated and fully diluted basis-with a CAGR of 40.2% in top and 135.1% in bottom-line respectively) and its NAV as on 31.12.2012 is Rs. 57.51. For the first 9 months of the fiscal 2012-13 it has clocked turnover of Rs. 271.61 crore with a net profit of Rs. 47.08 crore and as the equity capital post IPO remains the same due to offer for sale, this translates into an annualized EPS of Rs. 8.99 and thus the asking price is at a P/E of 52 to 60 and at a P/BV of 8.2 to 9.4 based on lower and upper price band. Thus issue is aggressively priced. The company has no listed peer for comparison.

The company is now facing competition from Askme, Asklaila, Getit, Sulekha etc and hence the first mover gains made in the past may see diminishing pattern going forward.

On BRLM's front, Citi Group and Morgan Stanley had mandate for 17 and 11 IPOs and out of them 4 IPOs failed to give listing gains to investors from both of them.

Remark: Apply at the lower price band at Rs. 423 per share (with upfront 10% discount to retail investors) for a lot as applicable under "safety net". (i.e. one can apply for a maximum of 100 shares or 4 lots to qualify for Safety Net)