Reliance Retail Ventures Ltd (RRVL), the retail arm of Reliance Industries Ltd (RIL), on Friday, July 16, said it has acquired a 40.95 percent stake in Just Dial Ltd for a total consideration of Rs 3,497 crore.
After the acquisition, Reliance Retail Ventures Ltd will make an open offer to acquire up to 26.0 percent in accordance with takeover regulations.
In an interview with CNBC-TV18, Bhavin Shah, founder & fund manager of Sameeksha Capital, Deepak Shenoy, founder of Capitalmind, and Prakash Diwan, market expert, discussed the deal at length.
First up, Shenoy said, “We are holding both Reliance and Just Dial, as a disclosure. The open offer price at Rs 1,022 sounds much lower than the market price of Rs 1070. So, we do not expect the open offer to be successful; it just provides a base to the stock. However, it will be interesting to see what Reliance does; does it fuse the synergies of Jio Mart into Just Dial, does reverse merger of some sort or is there something bigger. We are waiting to see that but it’s interesting synergies currently.”
Meanwhile, Diwan said, “The stock (Just Dial) has appreciated about 50 percent in the last few months, but after a bit of stability it would start seeing more traction. Integration is key. So, wait for integration and let us see the rollout plans. If that works well in favour of Just Dial then I do not see any reason why it could not get rerated or continue to have some momentum, which puts it at least 15-20 percent higher in the next 6-12 months.”
Shah said, “We are getting carried away if we start trying to find Facebook, Amazon, Apple, Netflix, and Google (FAANG) ideas in India. The market is trying to value some of these companies like that because there is a lack of other alternatives like Zomato, valuations of India Mart. I think we are far away from our FAANG moment.”
Disclaimer: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
For the entire discussion, watch the video.