[UPDATE]: Reliance Retail Ventures Limited (RRVL) has confirmed the acquisition of a controlling stake in JustDial Limited for Rs 3,497 crores. This allows RRVL to have 40.95% stake in JustDial. RRVL, the retail subsidiary of RIL, is also eyeing to buy another 26% stake in JustDial from public shareholders. The announcement would be made to acquire another 2.17 crore equity shares of JutsDial representing 26% stake soon. This will allow Reliance to have a majority stake holding of 66% in JustDial.
Reliance has put its weight behind VSS Mani – founder and current CEO of JusDial – who would continue to lead the growth of JustDial.
After the failed acquisition talk with TATA, JustDial is apparently all set to be acquired by Reliance. According to the latest media report, the acquisition of JustDial by Reliance could be announced within the next few days.
Mukesh Ambani, on the other hand, already started looking beyond Future Group, which is stuck in the legal crosshairs with Amazon. JustDial fits perfectly well in the long-term strategy of Mukesh Ambani to take Reliance, telecom to petrochemicals conglomerate, to new heights by leveraging on the huge database that JustDial – India’s oldest information search and listing company – has.
JustDial is expecting to evaluate the proposal in the next board meeting, which is scheduled for 16th July 2021. Sources have confirmed that the main agenda of the meeting is to approve the proposal, followed by an official announcement.
Reliance Acquires JustDial: Big Picture
- If Reliance acquires JustDial, then it could help the company to strengthen its local commerce business by leveraging on the database JustDial has been creating and managing for over 25 years.
- Reliance could acquire JustDial from its promotors in a $800 – $900 million deal.
- JustDial revenue in FY’21 decreased 32% to INR 824 crore.
- JustDial posted a net profit of INR 214 crore in FY’21.
- JustDial promotors are the biggest stakeholders in the company with 35.32% shares.
- JustDial has 30.4 million listings on its platform and a presence in 250+ cities in India. It also covers 11,000 pin codes.
- The growth in the listing has tanked in recent years due to the rise of startups who are pouring millions of dollars to acquire customers. The company is clocking just 5.5% CAGR in the listing, down from 30% YoY growth until 2015.
- JustDial reportedly has 129.1 million unique visitors in Q4 2021.
- Mobile phone accounts for 82% of the total traffic JustDial receives on its website.
Food For Thought
The flourishing startup ecosystem has emerged as the biggest challenge for JustDial in recent years. Banking upon investors money, startups are spending millions of dollars in reaching prospective customers, which has eventually reduced people’s needs and dependency on merchant search platforms like JustDial.
Reliance has been aggressively promoting JioMart to acquire a sizeable share of the retail e-commerce market of India. The company is working closely with Facebook to integrate its retail offerings with WhatsApp. This will allow 400 million users of WhatsApp in India to order from JioMart directly from WhatsApp.
The acquisition of JutsDial will help Reliance to capture the biggest chunk of the retail e-commerce market in India at a much faster rate. There is no one other than Reliance who can make the most of the unparalleled access to billions of information that JutDial has.
