Reliance Retail to sell 2% stake in Just Dial; stock falls 2%

Shares of Just Dial dropped over 2% in intraday trade on Tuesday after its promoter, Reliance Retail Ventures Ltd (RRVL), proposed to sell a 2% stake in the local search engine firm via the open market transaction to meet minimum public shareholding norms. Billionaire Mukesh Ambani-led company will complete the sale of the shares within eight trading days beginning December 21, Just Dial said in a regulatory filing.

Reacting to the news, Just Dial share price opened marginally lower at ₹621.20, against the previous closing price of ₹622.35 on the BSE. During the session, the stock declined as much as 2.4% to hit an intraday low of ₹607.20, while the market capitalisation slipped to ₹5,143 crore. The broader market also witnessed bearish trade, with the BSE Sensex down 465 points at 61,340 levels.  

Just Dial shares have delivered a negative return of 19.5% in the past one year, while it has risen nearly 15% in the six month period. In the past one month, the smallcap stock has gained 2.5%, whereas it has added over 1% in a week. The stock hit a 52-week high of ₹957.50 on October 21, 2022, while it touched a 52-week low of ₹520.30 on June 20, 2022.

As per market regulator SEBI's norm, promoters of listed entities, excluding PSU companies, holding more than 75% had to compulsorily sell their stake to comply with the 25% minimum public shareholding (MPS) norms. To meet regulatory requirements, Reliance will sell 2% of its stake in the company. Currently, RRVL holds 66.40% stake in Just Dial, out of 76.98% shareholding owned by promoter group entities.

“RRVL, the promoter of the company, intends to sell equity shares of the company for the purpose of complying with the requirements of minimum public shareholding under relevant provisions of the Securities Contracts (Regulation) Rules, 1957 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015,” Just Dial said in a BSE filing.

RRVL will sell 16,86,119 equity shares of face value of ₹10 each, constituting 2% of the total paid-up equity share capital of the company, through open market sale for achieving the regulatory norms. In September last year, RRVL, the retail arm of Reliance Industries, acquired sole control of 25-year-old search and discovery firm Just Dial.

Founded in 1996, Just Dial is one of India's leading local search engines, which was created to provide people with immediate access to fast, reliable and comprehensive information on businesses, products and services across the country. For the second quarter ended September 30, 2022, internet and catalogue retail company reported 58.6% YoY growth in net profit at ₹52.2 crore, while revenue stood at ₹205.3 crores, up 31.6% YoY. Active paid campaigns stood at 503,840, up 17% YoY, whereas traffic (quarterly unique visitors) was at 156.5 million users.