Just Dial IPO aims to cash in on 10% retail discount, safety net

Huge discount to retail investors for the first time in any IPO

NEW DELHI, May 20: On the back of the largest discount of 10% for retain investors and the growing internet penetration in the country, local search engine Just Dial Limited hits the capital markets on today with its public offering targeting to raise Rs950 crores.

“This is for the first time that any company is offering such a huge discount of 10% at the lower price band,” said Mr Arun Kejriwal, director of KRIS. “What is also notable is the fact that Just Dial has set aside only 10% for retail subscribers, coupled with a safety net and this is bound to enhance retail investor interest in the issue,” he said.

Just Dial has already raised over Rs 208 crore through issue of shares to anchor investors, including Goldman Sachs and HSBC, by allocating 39.37 lakh shares to anchor investors at a price of Rs 530 per piece.

The anchor investors include Goldman Sachs India Fund, HSBC Bank (Mauritius) Ltd, Birla Sunlife Trustee Company Pvt Ltd, DSP Blackrock Opportunities Fund and Deutsche Securities Mauritius Ltd, the filing said.

The IPO would see promoters and other investors selling 17.49 million shares or 25.2 per cent of the paid up equity capital.

Post issue the promoters would have 33 per cent and the issue does not involve the company issuing fresh shares.

As per McKinsey & Company, India’s middle class, generally comprising people with  annual income range of Rs 200,000 to Rs 1,000,000, is expected to grow by over 10 times to approximately 583  million people by 2025.

According to Internet World Stats, as of June 30, 2012, Internet penetration was at 11.4% in India, compared to over 78.1% in the United States. There were approximately 137 million Internet users in India, making it the third largest population of Internet users after China and the United States. According to TRAI, the number of mobile subscribers in India is expected to exceed 1,000 million by 2014. With the growth projected for India’s middle class and for Internet and mobile usage in India, we believe our potential user base remains largely untapped and offers significant potential for growth.

Analysts say these augur well for search engines like Just Dial which also plans to expand its bouquet of services.

Citigroup and Morgan Stanley are the book-running lead managers to the issue and Justdial plans to list on the BSE, NSE and MCX-SX.

Recommending subscription to the IPO, GEPL Capital said, with its unique, un parallel business model & strong brand recognition Just Dial Is expected to maintain its dominant position in the local search market.

The company’s business model is “efficient as it promotes continuity in subscriptions and cash flows”, GEPL said and remarked: “It is also noticeable that such kind of model is difficult to be replicated due to the challenge of establishing the requisite credibility and relationship with paid advertisers.”

As of December 31, 2012, Just Dial had no long-term borrowings which are a competitive advantage for the company and a platform to grow operations without being constrained by significant reliance on external financing sources, GEPL said.

HDFC Securities notes in its analysis that Just Dial search service bridges the gap between its users and businesses by helping users find relevant providers of products and services quickly while helping businesses listed in its database to market their offerings. “Its search service is particularly relevant to SMEs, which currently, do not have many other cost effective options to access and advertise to such a large number of potential consumers,” HDFC Securities says.

In its offer document Just Dial says it intends to keep up with the latest in mobile Internet technology to provide its search services. In collaboration with service providers and vendors, the company is in the process of developing the ability for users to complete a number of bookings and purchases which are integrated in the search results from our website, mobile Internet WAP site and our Master App, including reservations at restaurants, home delivery of, ordering groceries, booking doctors’ appointments and even taxi bookings.

The company is also in the process of developing a car listings website in which users can research and rate car models being offered for sale, list their cars for sale and receive price quotes from vendors of both new and used cars.

Another new application called “Quick Quotes” will provide prospective buyers with a price quote from multiple vendors and which will be available 24x7.

Just Dial’s consolidated total revenue from continuing operations increased from Rs716.0 million in fiscal 2008 to Rs 2,770.2 million in fiscal 2012, representing a CAGR of 40.2%. 

Pipavav Shipyard fixes Price Band of Rs 55-60 for IPO

MUMBAI, September 10, 2009: Pipavav Shipyard will enter the capital market with its IPO of 85,450,225 Equity Shares of Rs 10 each, with a price band of Rs 55-60, on September 16, 2009. The IPO closes on September 18, 2009.

Of the 85,450,225 Equity Shares, up to 600,000 Equity Shares have been earmarked for employees. The total issue, including the Employee Reservation Portion, will constitute 12.83 % of the post-issue equity share capital of the company. The net issue, i.e., the issue less the Employee Reservation Portion, will constitute 12.74% of the post-issue equity share capital of the company.

JM Financial Consultants Private Limited, Citigroup Global Markets India Private Limited, Enam Securities Private Limited and SBI Capital Markets Limited, are the book running lead managers and Kotak Mahindra Capital Company Limited and Motilal Oswal Investment Advisors Private Limited are the co-book running lead managers.

The issue is on a 100% book building process. The company plans to use the proceeds of the issue for the construction of facilities for shipbuilding, ship repair and the Offshore Business, margin for working capital and general corporate purposes.

Pipavav Shipyard will have India’s largest dockyard (upon completion and based on information available on the shipyards’ websites as to their actual capacity and their capacity under construction and assuming no further increases in such capacity).

The company has commenced construction of four vessels, the first of which is expected to be delivered in April 2010, with subsequent deliveries expected to occur at intervals ranging from one to three months thereafter.

Company executive deputy chairman Bhavesh Gandhi explained that Pipavav Shipyard currently has 10 firm order agreements for Panamax size vessels, 8 firm order agreements for Panamax size vessels subject to renegotiation, 4 firm order agreements for Panamax size vessels subject to arbitration and a notification of award of contract for 12 OSVs from ONGC. It has also submitted bids for seven naval vessels - five naval offshore patrol vessels and two cadet training ships.

The Pipavav Shipyard is located on the west coast of India adjacent to major sea lanes between the Persian Gulf and Asia. Upon completion of construction, the Pipavav Shipyard will be capable of ship construction and repairs for a range of vessels of different sizes and types, including naval vessels and coast guard vessels, as well as the fabrication and construction of products such as offshore platforms, rigs, jackets and vessels (but excluding sub-sea pipelines) for oil and gas companies.

The dry dock, measuring 662 meters in length and 65 meters in width, is capable of accommodating ships of up to 400,000 DWT and/or multiple combinations of smaller vessels including vessels catering to offshore activities such as offshore supply vessels (OSV), anchor handling tug supply vessels and multi-purpose support vessels. Installation of two Goliath cranes, each having a lifting capacity of up to 600 tonnes, is also in progress.

The Pipavav Shipyard was originally promoted by SKIL Infrastructure Limited and Grevek Investments and Finance Private Limited. These original promoters have been joined by Punj Lloyd Limited through its acquisition of 129,361,538 Equity Shares of the Company, which represents approximately a 22.29% pre-Issue shareholding in the company. SKIL has a track record of promoting infrastructure projects in India, and is experienced in owner-managed construction of infrastructure projects including the Pipavav Port, which received its first vessel in 1996, the Pipavav Railway and the Pipavav Link Road. Punj Lloyd is an engineering and offshore construction company in India providing integrated design, engineering, procurement, construction and project management services for energy and infrastructure projects.

Pipavav Shipyard is led by a team of qualified and experienced managers, both from India and abroad, who are focused on different aspects of shipbuilding. The company has also executed cooperation agreements with various companies that have substantial experience in the shipbuilding business.

For instance, it has entered into agreements with KOMAC, a Korean ship design consulting firm, to provide the Company with ship design, drawings, plans and documents, procurement support for supply of non-Indian sourced shipbuilding materials, shipboard machineries and equipments, production management services related to the start-up and initial operation of the Pipavav Shipyard, and technical support services related to the construction of the Panamax bulk carriers.

It has also entered into agreements with PILS Co. Limited of South Korea, a procurement and logistics firm, to assist it with the procurement of certain component parts for production, and has also executed a technical assistance agreement with SembCorp, a company which operates shipyards and offshore construction and fabrication facilities in Singapore.

Apart from focusing attention on the serial construction of large vessels built to standard specifications and widely used by ship owners, such as the Panamax bulk carriers, Pipavav Shipyard also intends to capitalize on expected growth in offshore oil and gas exploration and production activities by providing offshore fabrication facilities at the Pipavav Shipyard.

As a co-promoter, Punj Lloyd has agreed to conduct all of its offshore business (excluding the construction and fabrication of sub-sea pipelines) in India through the company and is expected to provide the company with access to opportunities in the Offshore Business industry.

Pipavav Shipyard also intends to focus on building ships for the military and the government, initially focusing on vessels for the Indian navy and coast guard. In addition, Pipavav Shipyard intends to utilize its shipbuilding facilities to repair a wide range of vessels, including VLCCs and OSVs, as well as naval, coast guard and other specialty vessels such as LNG carriers.

The Pipavav Shipyard is located adjacent to the Pipavav Port, a modern seaport. The Pipavav Port has connecting rail and road links, including a 273 km railway completed in 2003 and a link road completed in 2001.

The company’s subsidiary, E Complex, is involved in the development of a sector-specific Special Economic Zone (SEZ). Pipavav Shipyard Limited has established a unit in the SEZ developed by E Complex.

“Pipavav Shipyard Limited is proposing, subject to market conditions and other considerations, a public issue of its equity shares and has filed a red herring prospectus (“RHP”) with the Registrar of Companies, Gujarat, Dadra and Nagar Haveli, Ahmedabad. The RHP is available on the website of SEBI at www.sebi.gov.in and on the websites of the book running lead managers at www.jmfinancial.com, www.citibank.co.in, www.enam.com and www.sbicaps.com, and the co-book running lead managers at www.kotak.com and www.motilaloswal.com. Any potential investor should note that investment in equity shares involves a high degree of risk. For details, potential investors should refer to the RHP that has been filed with the Registrar of Companies including the section titled “Risk Factors”.

This announcement has been prepared for publication in India and may not be released in the United States. This announcement is not an offer for sale or solicitation of an offer to buy securities in the United States, or any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. The securities of Pipavav Shipyard Limited have not been registered under the US Securities Act of 1933, as amended (the “Securities Act”), and may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act.