JustDial Plans to Buy Back Shares; Shelves Acquisition Strategy via a Fundraise

Image Credit: Afaqs

Image Credit: Afaqs

BSE Listed Horizontal Directory Business JustDial has new plans of buying back the shares for as much as Rs 1,550 per share and decided to put its Rs 1000 crore fund raising plan on hold. The company is reportedly planning to buy back up to 25 % of the aggregate paid up capital to free reserves & use cash effectively.

Though the earlier objective of fund raise had been acquisitions with a focus on eCommerce.  Just Dial Founder and Chief Executive VSS Mani told ET that valuations of most companies are too high hence they have put their fund raising plan on back burner to wait for the market to settle down a bit.

Currently, the firm has Rs 815 crore cash on its books. It plans to spend Rs 100 crore on marketing and advertising for hyper-local business called ‘Search Plus’ which planned to be launched by August, but has been delayed as its website and mobile app are being revamped. The company is also looking to launch a payments platform called JD Cash this year.

Earlier this year, it introduced a marketplace for selling electronics and consumer durables online to strengthen its eCommerce ambitions. It is now also competing with eCommerce marketplace players such as Snapdeal, Amazon, Flipkart, ShopClues and Paytm.

Last month, Tiger Global which had first invested in Justdial eight years back, took a complete exit from it for over Rs 430 crore through an open market transaction. In 2014, SAIF and Sequoia Capital also took a part-exit from Justdial.

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As the market is throwing opportunities left, right & centre; this report highlights how JustDial is likely to be facing market consolidation challenges from various emerging vertical category product startups.

Still being in business for so long and being a market leader in its category, JustDial is aiming to reinvent the wheel & come up with a strategy to scale the business effectively.