Just Dial closes 15% higher on debut

Moneycontrol Bureau

Shares of the newly listed local search engine Just Dial got off to a rousing start Wednesday, finishing 15 percent up at Rs 611.45 on the BSE.

The phone and internet based service provider had opened at Rs 590 on the BSE and the NSE; 11 percent higher than its issue price of Rs 530 apiece.

The company had fixed the issue price band at Rs 470-543, which was over-subscribed 11.63 times. It allotted shares to retail investors at Rs 483 apiece.

Its shares surged 19.22 percent to touch a high of Rs 631.90 during the trading session.

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The company's market capitalisation stood at Rs 4,272.37 crore. There were pending sell orders of 571 shares. It was trading with a volume of 4,424,127 shares.

In an interview to CNBC-TV18, the management said that the company would improve margins by 2-2.5 percent going forward. The service provider company saw increase in traffic towards internet to enhance margins going ahead.

Brokerages had a mixed opinion on the debut listing of the firm.

Motilal Oswal had initiated 'buy' rating on the company with a target price of Rs 660. The brokerage expects Just Dial to post revenue compound annual growth rate (CAGR) of 33 percent over FY12-15E.

However, Ambit was not so impressed with the listing and had a 'sell' rating on the company.  According to Ambit, its fair value stood at Rs 420 per share.

Ambit does not see Just Dial retaining its dominance going forward. It expected both the topline and bottomline to grow by 25 percent going ahead.

"Given the punchy valuations we remain negative on current valuations and would urge buyers to sell into any pop today," Ambit added.

The company had recently raised Rs 950 crore through its IPO.

The company has already raised over Rs 208 crore through issue of 39.37 lakh equity shares to anchor investors including Goldman Sachs India Fund, HSBC Bank (Mauritius) Ltd, Birla Sunlife Trustee Company Pvt Ltd, DSP Blackrock Opportunities Fund and Deutsche Securities Mauritius Ltd.

Citi and Morgan Stanley were the book running lead managers to the issue.