Just Dial Valuation Very Expensive - Avoid

Just Dial provides search services on the information and user reviews from its local business, product and services database across India. Its search service is available to users through multiple platforms: Internet, mobile, telephone (voice) and text (SMS). 

In fiscal 2012, the company addressed over 254.3 million search requests across its platforms. As of December 31, 2012, the company was conducting approximately 195,100 campaigns for the paid advertisers.

IPO details

Issue Opens on --> May 20, 2013

Issue Closes on --> May 22, 2013

Price Band --> Rs. 470 - Rs. 543/- (Discount of 10% to Retail Individual Bidders)

Lot Size --> 25 Equity Shares & in multiple of 25 equity shares thereafter.

IPO Grading: --> IPO grade 5/5 by CRISIL

Issue size: --> Public Issue of 17,497,458 Equity Shares of Face Value of Rs 10 Each.

Net Issue: 17,497,458 Equity Shares

Valuations Analysis

• The EPS of the company for FY 13 stands at Rs 9.53. Book value of the company stands at Rs 20.21 and the issue is being offered at 23.26-26.87(x) of its book value (at lower and upper price band).

• The company is bringing the issue at the price band of Rs 470-543 per share. At P/E multiple of 49.61-56.97, the issue is one of most expensive ones in recent times.

• Though CARE has assigned very strong fundamentals rating to the IPO but the price is not justified as there are many more quality names in the secondary markets which are as strong as this company but trading at very reasonable valuations.