June 5, 2013 / 4:32 AM / 7 years ago

Justdial soars 15.5 percent on market debut

A broker reacts during trading at a stock brokerage firm in Mumbai September 2, 2008. REUTERS/Arko Datta/Files

MUMBAI (Reuters) - Search service provider Justdial (JUST.NS) rose as much as 19.2 percent in its stock market debut on Wednesday after the company raised about $165 million last month in the country’s biggest listing so far this year.

Shares in Justdial ended at 612.35 rupees after gaining 15.54 percent on the NSE. The stock hit a high of 631.9 rupees, compared with their initial public offer price of 530 rupees a share, valuing the company at 37.03 billion rupees.

Despite the strong debut, investment bankers and analysts said Justdial’s listing was unlikely to open up India’s moribund IPO market in the near term, given only a few medium-to-large sized issues are in the pipeline.

“Just Dial is a quality IPO and markets separate men from boys,” said Deven Choksey, Managing Director of K. R. Choksey Securities in Mumbai.

“The secondary market needs to be extremely strong for IPOs to benefit. So unless it is a unique IPO, it wouldn’t be successful.”

Justdial’s IPO, in which the company’s founders and private equity investors including Sequoia Capital and Tiger Global sold some of their shares, was the biggest since Bharti Infratel Ltd’s (BHRI.NS) IPO of about $750 million in December last year.

Mumbai-based Justdial, which offers search for local businesses through Internet and mobile platforms, sold 17.5 million shares through the IPO, or 25 percent of its total equity, which was subscribed 11.6 times.

The search service provider’s IPO has attracted foreign banks, including Goldman Sachs (GS.N) and HSBC (HSBA.L), as well as domestic institutional investors Birla Sunlife Trustee Co.

Citigroup and Morgan Stanley were the lead managers to the issue.

Reporting by Indulal P.M., Additional reporting by Abhishek Vishnoi; Editing by Rafael Nam and Jijo Jacob

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