From Mumbai garage to IPO,Justdial comes a long way
For most entrepreneurs,it would be a crisis of confidence if their first venture failed.
For most entrepreneurs,it would be a crisis of confidence if their first venture failed. However,that was not how VSS Mani saw it. After his venture Ask Me failed in 1989,Mani waited for seven years to launch his second venture,Justdial.
That venture called Justdial took off,aided by the rise in teledensity and growing internet use and last week,its IPO emerged as one of the rare successes as it clocked an investor interest worth over Rs 11,000 crore. That was 11.6 times the Rs 950 crore that Justdial aimed to raise.
Mani once aspired for an engineering education at an IIT,but found himself more inclined towards finance and so enroled for the chartered accountancy course.
He had to leave his studies midway to take up a sales job and support his family.
The entrepreneur in him saw that there would be a need for telephone- and mobile-based,even when the telecom industry had not grown to what it is today. This drove him to start a venture in that space and keep going with a second one after it failed.
What is currently valued at over Rs 3,700 crore at the higher end of its public issue pricing of Rs 543 per share started with a humble beginning of Rs 50,000 in a small 300 sq ft garage office in Malad in Mumbai. The location was prompted by the choice of phone number Mani managed to get.
Today,Justdial provides search requests over internet,mobiles,telephone and SMS on around 9.1 million business listings majority of them being small and medium enterprises across the country.
In the financial year 2011-12,the company addressed 254.3 million search requests across its platform.
The online advertising space contributes a large part of Justdials revenue. Revenues has grown from Rs 71.6 crore in March 2008 to Rs 277 crore in March 2012. Profits have grown from Rs 1.7 crore to Rs 52.8 crore over the same period. As on March 2012,the company was sitting on a cash pile of Rs 237 crore.
While there may be no direct major competitor to Justdial in its line of business,there are a lot of portals who are in the online space fighting it out and the prominent ones include flipkart.com,naukri.com,shaadi.com,99acres.com etc.
The space has been growing and as per the Netscribes report on online advertising market in India that was released in 2012,of the total advertising market of around 25,000 crore,internet had a market share of only 3.4 per cent in 2011 but was expected to rise to 4.7 per cent in 2012. The mobile internet searches have grown exponentially from 9.6 million searches in FY11 to 58.3 million in the first nine month period of FY13,according to the report.
While Mani has created wealth for himself too over the years and his current stake in the company is worth over Rs 1,100 crore at the higher end of the IPO price band,it will have to be seen if he can resist the temptation to sell out his venture to some global player in the coming years.
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