Can you tell me how the Reliance deal with Just Dial will happen? Do you see investors gaining from the deal or should they book profits?

During the previous week, Reliance Retail Ventures or RRVL, announced that it would pay over Rs.5,400 crore to buy 67% stake in Just Dial. This deal will make Reliance the largest shareholder and reduce VSS Mani’s holding in Just Dial to 10.35%.Firstly, Just Dial will make a preferential offer to RRVL followed by VSS Mani and family selling a part of their stake to RRVL. Finally, Reliance Retail will make an open offer to 26% minority shareholders.

That brings me to your second question, what should investors do; exit or hold on? The immediate reaction was cautious, but that is too short a time. Remember, RRVL brings a much better fulfilment ability to Just Dial and that is worth a lot. Just Dial investors can wait for synergies of deal to kick in, which could be value accretive in medium term. In a way, this is the right deal, in the right place and at the right time and Just Dial investors should gain.