Why Reliance bought Just Dial

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Editor's note: To call it an unusual deal would be an understatement. When Reliance Retail Ventures Ltd, part of Mukesh Ambani’s Reliance Industries Ltd, announced last week that it would pay as much as Rs 3,497 crore to buy a 40.95% stake in Just Dial, a company that makes nearly all its money by listing small businesses on its website, there were two things about the deal that didn’t add up.  1. Just Dial appeared to be a company that didn’t have much of a future, as much of the information on its website was increasingly available for free on the internet. It’s revenues were flagging and its market valuation had halved since hitting a peak after listing in 2013. Besides, founder V.S.S. Mani had made multiple unsuccessful attempts to change its business model.  2. The Just Dial deal is the biggest domestic acquisition in Reliance’s history (its Rs 24,713 crore deal with the Future Group is yet to close as US-based e-commerce major Amazon has contested it). Over and above the Rs 3,497 crore, Reliance will also make an open offer …