In the late hours of Friday evening, India’s leading multinational conglomerate, Reliance Industries Limited (RIL) announced an acquisition of a controlling stake in Indian company Just Dial on its official Facebook page. The acquisition will be done by a subsidiary of RIL- the Reliance Retail Ventures Limited headed by Isha Ambani and the deal has been struck for a total consideration of Rs 3,497 crores.
As per the offer, Reliance Retail is set to hold 40.95% of the tech company and would make an open offer to acquire up to 26% in accordance with takeover regulations.
“Reliance Retail Ventures Limited (“RRVL”), Just Dial Limited (“Just Dial”) and VSS Mani & others, executed definitive agreements” stated the post, disclosing the particulars of the deal.
VSS Mani, the Managing Director and CEO of Just Dial is expected to continue his role. The media release by the company, explained the terms of the deal as follows-
a) Preferential allotment of 2.12 crore equity shares (equivalent to 25.33% post preferential share capital) at price per share of Rs 1,022.25
b) Acquisition of 1.31 crore equity shares by RRVL from VSS Mani (equivalent to 15.62% post preferential share capital) at a price per share of Rs 1,020.00.
c) Shareholders agreement governing certain inter se rights and obligations between the parties
“The capital infused by RRVL will help drive the growth and expansion of Just Dial into a comprehensive local listing and commerce platform. Just Dial would expand discovery on its platform and enhance transactions for millions of products and services.
These investments will leverage Just Dial’s existing database of ~30.4 million listings and its existing consumer traffic of ~ 129.1 million quarterly unique users (as on 31 Mar 2021),” said the press release by RIL.
Statements by VSS Mani, founder, and CEO of Just Dial, and Isha Ambani, Director of Reliance Retail Ventures Limited were also shared with the media.
Calling Mani “a first-generation entrepreneur who has created a strong business through his business acumen and perseverance,” Ms. Ambani expressed her excitement to join hands with the company.
“The investment in Just Dial underlines our commitment to new commerce by further boosting the digital ecosystem for millions of our partner merchants, micro, small and medium enterprises,” she added with hopes of further collaboration and expansion together.
Mr. Mani shared his thoughts on the occasion, reminiscing about the start of his company. Sharing the vision of the team at Just Dial of building a “connected single platform dedicated to providing fast, free, reliable and comprehensive information to our users and connect buyers to sellers.”
He added that over the years, this vision was evolved to not only provide search and discovery but “drive commerce across merchants through B2B platform and enable the further consumer to merchant commerce.”
“Our strategic partnership with Reliance enables us to realize this vision and transform the business going forwards” he added. Just Dial today said its board has approved raising up to ₹2,164.8 crores through issuance of shares on a preferential basis to RRVL.
Out of the total 40.95% acquired by Reliance Retail, it has received a preferential allotment of 2.12 crore equity shares, which is equivalent to 25.33% post preferential share capital at a price per share of ₹1,022.25.
The Reliance Industries’ subsidiary has acquired 1.31 crore equity shares from VSS Mani, which is equivalent to 15.62% post preferential share capital at a price per share of ₹1,020.00.
Reliance Retail Ventures Limited spans over a wide array of departments offering Indian consumer electronics, food and grocery, fashion, jewelry, footwear, and clothing.
Just Dial is an Indian Internet technology company that specializes in local search, B2B, e-commerce for different services in India over the phone, website, and mobile apps.
With great popularity and market, as well as a well-penetrated network with several thousand local merchants, producers and retailers, the movie seems promising to Indian consumers in terms of greater options, as well as the small business community in terms of better platform and reach through the combined strength of both platforms.