By Sachin Murdeshwar

Mumbai :Just Dial has announced that its initial public open offer would be available to the public from May 20 to May 22. The shares will be available in a band of Rs.470-543 per share, according to a release from the company.

The company which describes itself as a local search engine, is looking to sell 1.74 crore shares which will constitute 25.02% of the fully diluted post-offer paid-up equity share capital of the company.

The IPO is not a fresh issue but an offer for sale, which means that existing stakeholders would be selling their stake rather than the company raising money for its activities.

A discount of 10% to the floor price is being offered to retail investors. Retail investors are those investors who invest Rs.2 lakhs or less. The IPO would also feature a safety net, by which the sellers would agree to buy a portion of the stocks back if it underperforms.

The company will be listed on the BSE, the National Stock Exchange and MCX Stock Exchange.

The investment bankers handling the issue are Citigroup Global Markets India Private Limited and Morgan Stanley India Company Private Limited. Karvy Computershare Private Limited is the Registrar to the Offer.

Rating agency Crisil has given it a rating of 5/5 indicating strong fundamentalsThe issue size for the forthcoming initial public offering (IPO) of search engine service Just Dial could have been just 10% of the paid up share capital instead of 25% but for a nudge by Securities and Exchange Board of India (Sebi).

This, along with several other key recommendation by the market watchdog, alerted the dimensions of the offering from what its promoters had earlier envisaged.

Last year, when Just Dial filed its offer document it intended to sell shares amounting to just 10% of the fully diluted paid-up equity share capital.

In other words, it was looking for valuations of more than Rs 4,000 crore. As per rule 19 (2) (b) of Sebi ICDR (Issue of Capital and Disclosure Requirements) Regulations, a company has to allot at least 25% of shares to public during an IPO.

However, there is an exemption to the rule if post issue capital of the company at the issue price is more than Rs 4,000 crore. Such companies are allowed to go public with 10% public shareholding and given three years to comply with the 25% public shareholding requirement.