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Just Dial Ltd IPO Review (Subscribe)

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Review By K.M. Global Financial Services Ltd on May 21, 2013

Issue Period: May 20-22
Issue Price (Rs): 470-543
Issue Size (Rs Cr): 822 - 950
Minimum Order Size: 25 Shares
Mcap (Rs Cr): 3,284-3,794
IPO Grading: CRISIL 5/5
Listing: NSE, BSE, MCX-SX
Promoters: V.S.S. Mani & Family
Grey Market Estimate Premium of Rs 46

Retail Discount: 10% to Floor Price
Safety Net: After 180 days

Just Dial Ltd is India’s leading local search engine. It is a technology based company providing information about local businesses, products and services across India via Internet, mobile, Telephone voice and text messages (SMS). Justdial is quick and efficient at providing relevant directory information to users. The company is monetizing its database by providing featured listings to advertisers and moving their campaigns to the top of the queue.

Strengths

  • Riding the Growth in Online Advertising — The online advertising market is growing rapidly since it reaches the target audience at a cheaper cost as compared to traditional media. Justdial has taken advantage of this shift as the number of campaigns on its platform have grown from 40,500 in March, 2009 to 195,100 in March, 2013.
  • Positive Cash Flows — Justdial has shown consistent and continuous revenue growth every year. The company’s negative working capital cycle and impressive operating leverage have helped it deliver a steady growth in cash flows and a high return on equity.

Risks

  • Emergence of Disruptive Technologies — Justdial needs to be ahead of the curve in anticipating changes in technologies and predicting user behavior to maintain its market share. New technologies enabled by rising data usage on mobiles could disrupt its business.

Conclusion / Investment Strategy

We recommend that investors subscribe to Just Dial Ltd’s IPO for listing gains. The company has built a strong brand in the local search space which is being monetized by capturing marketing spends of local businesses. We expect heavy institutional interest for this issue due to its unique business model and rapid revenue growth.

Reviewer recommends Subscribing to the issue.

Review By K.M. Global Financial Services Ltd on May 21, 2013

More Just Dial Ltd IPO Views / Analysis / Recommendations ...

The Just Dial IPO Analysis helps you to understand about the company, offer detail, valuation, capital structure and financial performance. Our SEBI registered IPO Analysts tells you if Just Dial IPO worth investing. The Just Dial IPO Note sets the IPO expectations in systematic way which tells you if Just Dial IPO good to buy (good or bad / yes or no). The IPO Forecast tells you weather to invest in Just Dial IPO by providing IPO recommendations i.e. subscribe, avoid and neutral.


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