Just Dial IPO Makes Amitabh Bachchan Richer
Indian search firm Just Dial Ltd. on Wednesday successfully closed its initial public offering, by getting bids for twice as many shares as it was offering to sell.
The deal is notable for two reasons. Firstly, the numbers: The $173 million-share sale is only the third successful IPO on India’s major stock exchanges this year.
Secondly, one of the beneficiaries: Bollywood icon Amitabh Bachchan, who has owned 62,794 shares, or 0.1% of Just Dial, since February 2011.
Though Mr. Bachchan won’t be selling his equity in the share sale, his investment could now be worth as much as 34 million rupees ($615,249). Meaning, he has made a theoretical profit of 33.5 million rupees ($603,048).
That’s probably peanuts for Mr. Bachchan in sheer amount, but his return would be a neat 54 times his original investment.
To be sure, this profit is only on paper, and real returns will come only when Mr. Bachchan sells stock.
Also, the price of Just Dial’s shares is yet to be finalized.
The company is selling 17.5 million shares at a price in the range of 470 rupees ($8.6) to 543 rupees ($9.9) per share, and the final price will be decided by investment bankers based on the amount of bids from investors.
Mr. Bachchan could not be reached for comment.
The star, who recently attended the Cannes film festival for his first Hollywood appearance in movie the Great Gatsby, is also Just Dial’s brand ambassador.
He signed a three-year contract with company to that effect in December 2010.
Just Dial’s IPO will allow the company’s existing investors like Sequoia Capital, SAIF Partners and Tiger Global to sell a part of their stake, according to the IPO prospectus.
Follow India Real Time on Twitter @IndiaRealTime.
Source : By Ashutosh Joshi, http://blogs.wsj.com/indiarealtime/