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Just Dial Soars after CLSA Adds Stock to Asia Portfolio

Just Dial shares rose as much as 5.5 per cent on Friday after CLSA added the stock to its Asia ex-Japan long-only portfolio. Just Dial will have a weightage of 3 per cent in CLSA’s portfolio. The addition is noted in CLSA’s strategist Christopher Woods’ Greed & Fear report dated Friday.

The Asia-Pacific focused brokerage has removed a Korean company to make way for Just Dial, which has been under huge selling pressure of late.

Just Dial shares are down 24 per cent over the last month as compared to a 1 per cent loss in the BSE Sensex.

The sharp selloff in Just Dial has come amid fears of redemption by pre-IPO investors, whose lock-in period expires on June 5, 2014. This could put a large number of shares in the open market.

According to Nirmal Bang, private equity investors own a 41 per cent stake in Just Dial and they will be allowed to sell their holdings once the lock-in period is over. The value of these holdings at the current market price of Rs. 1,005 per share is Rs. 2,890 crore, the brokerage added.

Despite the recent selloff, Just Dial is one of the few Initial Public Offer (IPO) success stories in recent times, where investors have netted handsome returns. The stock, which started trading on June 5 last year, was issued at Rs. 530 to retail investors.

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