India’s Just Dial wins IPO approval
Indian search engine Just Dial has won approval for its IPO, putting VC backers Sequoia Capital, SAIF Partners and Tiger Global on course for a partial exit.
The company, which plans to sell approximately 9.55 million shares, abandoned a previous attempt to list last year due to market uncertainty. It refiled its draft red herring prospectus in August and the Securities and Exchange Board of India (SEBI) issued final observations on the documentation on March 20.
Just Dial itself will receive no money as a result of the offering, with all the proceeds going to investors. Sequoia will sell 1.01 million shares, SAIF will sell 4.03 million shares, and Tiger Global will sell 2.5 million shares and 1.6 million shares owned by separate funds. EGCS and SAP Ventures will exit approximately 347,000 shares and 65,000 shares, respectively.
The VC investors between them own 62.61% of the company and will hold 48.85 after the listing. The remainder - 37.39% - is owned by founder and CEO V.S.S. Mani and his family, and their holding will not be reduced.
Just Dial helps users find providers of products and services and businesses market their offerings through listings in its database. In the 2012 tax year, the company addressed over 250 million search queries from users and ran approximately 181,000 campaigns for paid advertisers. It reported a net profit from continuing operations of INR522.8 million ($9.6 million), up 81.4% year-on-year, as revenue rose 47.6% to INR2.77 billion.
Just Dial expects to benefit from India's rising middle class - defined as people with annual incomes ranging from INR200,000 to INR1 million - which McKinsey & Company projects will grow more than tenfold to 583 million by 2025. India was the world's third-largest internet market by users as of year-end 2011, yet internet penetration is just 10.2%, compared to 78.3% in the US.
Sequoia and SAP invested INR3.27 billion in Just Dial in June after the first attempt at an IPO failed. It previously raised $15 million from a SAIF-led group in 2006, $20 million from Tiger Global and $10 million from Sequoia in 2009, and then $7.5 million from SAP and Sequoia in 2011.
The IPO is being run by Citigroup Global Markets and Morgan Stanley.
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