Just Dial IPO - Is it Worth it?

Just dial is going to be one of the first of its kind in the Indian securities market listing as it is a local search engine and had Amitabh Bachchan as its brand ambassador.  Bachchan was allotted 62,794 shares at a price of Rs 10 in January 2011, according to a disclosure in the company's red herring prospectus. The shares were then valued at Rs 6.27 lakhs and today during his stocks in Just dial has appreciated more than 4600%.

Issue Price

The company has fixed the issue price band at Rs 470—543 and will give Rs 47 (10 per cent to the floor price) discount to retail investors. The offer will close on 22 May 2013.

Who Should Subscribe?

This is a new issue in the said sector and is vulnerable of Google gets into local search engine traffic. Retail traders can go for it as they are getting a safety net for 6 months for listing gains. Secondly, investors with high risk appetite can go for it for diversification purposes as this is a new domain and presently they have no competitor in India and they have first mover advantage.

Why Retail Traders Must Go for this IPO?

We are saying that retail traders must go for the IPO as they are getting the ‘safety net’ provision for 1000 shares which means that if the market value of the scrip falls below the issue price at any time during the scheme period, promoters will buyback shares at the sale price from original allottees. The issue is going to be fully subscribed on 22 May 2013 as it is a high profile IPO.