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Just Dial Buyback
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The Board of Directors of Just Dial LTD. approved a share buyback for its investors on Jul 20, 2018. The details of the buyback include:

Record Date: October 12th, 2018

Buyback price: Rs. 800

Premium/Discount as per closing price on 20 Jul’18: +37.78% on Rs. 580.6 

Buyback of shares: 27,50,000 equity shares

Amount of Buyback: Rs. 220 crores (being *24.26% of the aggregate of fully paid-up equity share capital and free reserves, which is in compliance with the maximum permissible limit of 25%)

*Shareholding Pattern: Promoters have 33.68% holding i.e. 2,26,93,915 equity shares. The Public Shareholding is 46.15% as on March 31, 2018 with Non institutional Public shareholding being 20.18%.

*Shareholding with up to 5000 shares: 24,90,750 shares representing 3.7% of total 6,73,85,975 shares.

The maximum no. of shares to be held to qualify as small shareholder are 250 shares. Reserved shares for retail investors is 4,12,500. Hence the acceptance ratio comes out to be 16.56%.

Following are the dividends as provided by the company in the past 2 years:

Corporate Action

Price

Ex-Date

Buyback of shares

-

3 Dec 2015

Final Dividend

2.00

10 Sep 2015

Dividend

2.00

11 Sep 2014

 

Company has tried in the past to stimulate its share price through a buyback offer but the price has only dropped by 45% approximately since last buyback period of Dec’15 to Sep’18.

Company’s share price fell 4% the next day after the buyback announcement and closed at Rs.556 on 23 July’18 as compared to the 20 July’18 closing of Rs. 580.

Over the last 4 years, balance sheet of Just Dial has been stagnant with no significant increase in profits. Its net profit in year ended March 2018 was on the similar level at Rs. 144 crores as the year ended March 2015 at Rs. 139 crores whereas the costs have only increased.

Over the years, Just Dial has failed to innovate or expand in new territories which has made the company lag behind other companies. Niche players have entered Just Dial's generic local search services business and disrupted its user base.

Therefore we recommend investors to avoid the buyback.

*Source: Company Annual Report 2018

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