Directory services and ecommerce company JustDial will buy back shares worth Rs 165 crore from shareholders. In a filing with the Bombay Stock Exchange, JustDial said that buy back up to 10,61,499 fully paid-up equity shares of face value of Rs 10 each at a price of Rs 1,550 per equity share.
“The buyback is being undertaken by the company to return surplus funds to its shareholders, which are over and above its ordinary capital requirements and in excess of any current investment plans”, JustDial said in the notification. It added that the buy-back will improve earnings per share, achieve better capital structure and mitigate short-term market volatility.
The buy-back will be undertaken from shareholders as of December 4 through a tender offer.
Fund raising put on hold
Earlier in June, JustDial put on hold its Rs 1,000 crore fund raising plan instead opted to buy back shares. The primary objective of the planned fundraise had been acquisitions with a focus on e-commerce. JustDial founder & CEO VSS Mani had at the time said that valuations of most companies were much higher than they should be and there were very few companies of substance, hence they put their fund raising plans on the back burner till the market settled down a bit.
Tiger Global stake offload
Over the past year, New York-based hedge fund Tiger Global has offloaded majority of its stake in JustDial. It first sold a 3.4% stake in JustDial for Rs 300 crore in March, followed by shedding an additional 2.1% stake for Rs 162 crore through open market transactions in May, and finally offloading a further 5.37% stake for Rs 408 crore in the same month. Tiger Global is believed to have sold a partial stake during JustDial’s 2013 IPO as well. Following this stake sale, Tiger Global now has 3.81% stake left in JustDial. Tiger Global had invested about Rs 77 crore in JustDial in 2007 and a further Rs 30 crore in 2009.
For the quarter ended September 30, JustDial’s net profit increased 47.03% year-on-year to Rs 46.3 crore from Rs 31.49 crore. Total income increased to Rs 171.27 crore during the quarter growing 16.9% from Rs 147.4 crore in the same quarter last year. Adjusted operating EBITDA was Rs 46.93 crore, up 3% from Rs 45.78 crore last year.