Online telephone directory company Just Dial is raising up to Rs 1,000 crore through issue of equity shares as it moves into the highly competitive e-commerce space, reports the Economic Times. The company disclosed its plans after its second quarter results, which saw its operating revenues rise 31% to Rs 147 crore.
The bid to raise funds was approved by Just Dial's board on Monday, and is now awaiting shareholders approval. Although Just Dial Founder and CEO VSS Mani confirmed the plans, no further detail regarding the matter were shared with the Economic Times.
Earlier this year, Just Dial had launched its Search Plus business, making the move from just a listing and discovery platform to an online transactions company. The company had 20 such services on platform like ordering groceries, flowers, pharmaceuticals, electronics and booking doctor’s appointments covering 145,000 merchants. While these services are already available on the company’s website, they will now also be available on mobile.
In a recent report financial holding company Nomura estimated that this business could have a GMV of $3.5 billion or Rs 21,000 crore in the next 10 years. The report also estimates that Just Dial will spend around Rs 25-40 crore this year in marketing the search plus business.
The Nomura report was quoted in the report as saying, "We are positive on Justdial leveraging its leadership in local search by expanding into Search Plus services which should lead to synergistic benefits in its core search business, while enabling faster growth through targeting less-monetised product-vendor relationships."
According to Gartner, the e-commerce market in India is expected to reach $6 billion in 2015, a 70% increase over 2014. The three prominent players in the burgeoning e-commerce market are Flipkart, Amazon India and Snapdeal.
Last month, Just Dial lodged a police complaint in the Bangurnagar police station in Mumbai, alleging that a rival listing company Clear India Pvt. Ltd. had stolen its database of 9 million clients. Raman Muttukrishnan, Manager at Just Dial had filed the complaint, accusing Clear India of stealing the online phone directory giant’s database and then using the database for the benefit of their own business. Just Dial also accused Clear India of sabotaging their business and maligning the company’s reputation.
Related Tags:Online telephone directory company, Just Dial, highly competitive e-commerce space, CEO VSS Mani