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Reliance in talks to buy Justdial

Founded 48 years ago, Reliance Industries Limited is an Indian multinational conglomerate with its business varying from petroleum, natural gas, retail, mass media, telecommunications, textile to natural gas, petrochemicals, and energy. It is the largest publicly traded company in the country by market capitalization.

It has crossed the Indian Oil Corporation, which is owned by the Government of India and has become the largest company in India by revenue. On September 10, 2020, it has become the first company of Indian origin, to have a market capitalization of more than USD 200 billion. With a ranking of 96 in the Fortune Global 500 List of the largest corporations of the world in 2020, it gives employment to around 195,000 employees, thus making it is the eighth largest source of employment in the country. 

how big is the reliance industry? detailed case study

Reliance Industries:

The Dhirubhai Ambani founded company is the largest exporter of India, which has the share of 8% of the total merchandise exports of the country and has the access to markets of 108 countries. It is such a high revenue-generating company that it is responsible for 5% of the total revenue of the Indian government from customs and excise duty. It has been claimed to be the highest income tax payer in the private sector of the country. The net income of the company as of 2021 is USD 7.5 billion. 

The Chairman of the company is Mukesh Ambani, whose family holds 49.38% of the shares of the company, while the remaining shares are held by public shareholders. The largest non-promoter investor in Reliance Industries is the Life Insurance Corporation, holding a share of 7.98%. The Mumbai-based company has many subsidiaries like Jio Platforms, Reliance Retail, Reliance Petroleum, Jio Payments Bank, Mumbai Indians, Alok Industries, Reliance Foundation, Network 18 Group. 

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s&p affirms reliance industries' rating at bbb+ with stable outlook

From 1994 to 1997, Reliance Industries has won the National Energy Conservation in petrochemicals.In the year 2000, it was selected as one of the world’s 100 managed companies by IndustryWeek magazine. It has been awarded the National Golden Peacock Award in 2011.

Founded in 1996, by VSS Mani, Justdial is a technology company incorporated in India. The company aims in providing a platform for local search, B2B, e-commerce, and other services which can be conducted over a phone. The Mumbai-based company has more than 10,984 employees with a database of 29.4 million listings and 536,236 active paid campaigns. 

justdial business model: how does it make money

When started in 1996, it was a yellow page company. But then in 2007, it launched an internet and mobile application version for the database which was called Then in 2013, it issued its shares between prices of INR 897 and INR 898. 17.5 million shares have issues, out of which 13.5 million were there for the public, and the rest were for the investors at the rate of INR 530 per share. 

The company also has “Justdial Social”, which is a service that collects content from social media websites, TV, news, and “Search Plus Service”, which manages online transactions through the web and mobile application. The promoters of Justdial, VSS Mani, and family have 35.5% of the share of the company which is at present of the value Rs2789.9 crore. 

justdial | linkedin

Both these big names are in a news together. Reliance Industries is in talks to acquire Justdial, a local search engine, for USD 800-900 million which will be equivalent to Rs 5920 crore- 6600 crore, as announced on July 16, 2021. This deal if implemented will help Reliance Retail make use of the merchant database of Justdial and will also make use of the network the company has. Reliance Industries want to push its own local commerce and payments so that it can play in the market which is highly competitive. 

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On Judtdial’s part, the proposal will be evaluated on July 16 and it is expected that they will make the announcement the same day. Reliance is expected to buy a share partly from Mani and would then make an open offer for an extra 26% of the shares of Justdial which could lead to a Rs 4035 crore payout. If the open offer is fully subscribed, Reliance will have more than 60% stake in Justdial and Mani will become a junior partner who will help Ambani in running the operations. 

The deal has been in talks since April, but now they have increased their pace.
Now, we have to wait and watch what Justdial has to say to the offer.


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