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Just Dial Ltd
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Ladies and gentlemen, good day, and welcome to Just Dial Limited Q1 FY '22 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rishit Parikh from Nomura Financial Advisory and Securities. Thank you, and over to you, sir.
Thank you, Malika. On behalf of Nomura, I would like to welcome you all to Just Dial's 1Q FY '22 Earnings Call. We have with us the CFO of the company, Mr. Abhishek Bansal. Unfortunately, due to exigencies, we couldn't have Mr. VSS Mani on the line today. Without further delay, I would now like to hand over the call to the management. Over to you, Abhishek.
Thanks, Rishit. Hi, everyone. Welcome to Just Dial's earnings call for first quarter fiscal '22. Before we discuss quarterly results, I shall share a quick update on our strategic partnership with Reliance. Reliance Retail Ventures Limited, Just Dial and the promoters have entered into a definite agreement under which, firstly, Reliance shall acquire 25.33% stake in the company via new shares that will be issued through a preferential allotment for total about INR 2,165 crores. Secondly, Reliance shall also acquire secondary stake from Mr. VSS Mani for about INR 1,332 crores, which would be equivalent to 15.62% on post preferential share capital. The above acquisitions will take Reliance stake to about 40.95%, and it will figure an open offer for a further 26% stake of the company on a fully diluted basis. Assuming a full pickup in the open offer, Reliance would hold about 66.95% stake in the company post the transaction on a fully diluted basis. The Reliance Retail Ventures Limited has already made an announcement for the open offer for a total consideration of approximately INR 2,222 crores; current promoter shareholder residuals stake of about 10.69%; and Mr. VSS Mani shall continue to drive next phase of Just Dial's growth as MD and CEO of the business. Coming to quarterly results. As we all know, the unexpected second wave of COVID-19 had a significant impact on the economy as a whole and SMEs in particular. Our operating revenue for the quarter stood at INR 165.4 crores, declining 5.8% quarter-on-quarter, with lockdown easing and impact of COVID-19 abating post the first phase, monetization had been on an improving trajectory until March 21. However, second wave restrictions impacted monetization during first quarter of fiscal '22, and collections declined about 29% sequentially. Monetization should likely recover here on with COVID second wave impact also reducing. As we had communicated earlier, we advertise during IPL 2021 to promote our newly launched B2B platform, JD Mart. We spent about INR 15.5 crores on advertising and promotion during the quarter. The campaign has resulted in good branding and awareness about the platform. As a result of this lumpy expense booking during the quarter, we have incurred loss for the quarter. Adjusted EBITDA stood at a negative INR 10.4 crores. Other income was at normalized levels of INR 22.8 crores. And overall, we had a loss of about INR 3.5 crores at PAT level. Cash and investments stood at INR 1,532 crores as on 30th June. Coming to operational highlights. Despite COVID impact, traffic witnessed only 3.9% sequential drop to 124.1 million unit users for the first quarter. On JD Mart, we have already rolled out logistics services on our mobile site. Apps should follow shortly. In parallel, we are working to enable end-to-end transactions on JD Mart, under which a buyer can place order for products listed on JD Mart, payment can be made in full or part. Payments shall be routed via JD Mart's payment escrow service, mechanism. Seller can ship products via JD Mart logistics service or even directly. And ultimately, buyers shall -- sellers shall receive payment upon delivery confirmation by the buyer. So with this brief update, we shall now open the floor for questions. Thank you.
[Operator Instructions] Mr. Rishit?
Yes. This is Rishit. I'll go ahead with the first question as we see the Q&A queue assembly, right? So couple of questions essentially from my side, right. One, if you could -- related to the transaction, if you could just talk about the synergies or the benefit that we'll have from the access to Reliance post this transaction? Is there a let's say, 3- to 5-year strategy that we sort of embarked on before we went ahead with this transaction? That's one. Second, on margins, I think realizations again looked much softer. Are we discounting again to retail customers? And if you can just provide a color on how do we see that traffic cringing up in the next couple of quarters?
Okay. So Rishit, on your first question on synergies. See, at this point of time, we have entered into a definite agreement. So the transaction will take some time to get concluded. There are multiple steps to the transaction. So I think once that happens, we have RRVL on our board. That is when we will be holding detailed discussions around potential synergies, et cetera, and we would be in a better position to elaborate on the same. On your second question around the margin. So at this point of time, see till March, things are on a -- in fact, in March, we were at about 90-odd percent of the COVID level. But the second wave obviously got all of us off guard. So last particular quarter, not much about discounting, but definitely, there were SMEs who if renewals were due, they wanted to push those renewals out. High-value SMEs would want to wait for their business to recover and then participate that. So yes, I mean first quarter did have a impact on collections, but with second wave abating likely collections to improve hereon. And as and when collections, et cetera, improve, both campaigns and realization should be back on track.
Sure. Just on the first question, if I can probe a little more. We would have done some amount of due diligence, right, before we sort of thought about this transaction. I just wanted to get the initial thoughts and not like a detailed strategy. So that's one. And just a follow-up that I had is that even after spending about INR 50 crores of ad spend, right, the traffic is largely similar. On a Q-o-Q basis, it's come down, right? If you can just provide a little more color on that, that will be super helpful.
On -- yes, definitely, obviously, both parties would have engaged to figure out what all can be done. So over the last several years, we have created a great asset in terms of 30 million listings, the relationships with SMEs. And the RRVL also wants to grow India's -- whatever SME ecosystem, digitalize SMEs, et cetera. So there could be multiple areas where synergies could exist. And sorry, what was the second part of the question?
Even after the ad spend of roughly about INR 50 crores, right? If you look at the overall traffic, it's still weak.
Correct. See in -- as far as advertising is concerned, a couple of things. One, there would never be a one-on-one correlation in terms of profit on advertising. What this advertising has done is that today, if my sales personnel goes and meets any SME and talks about JD Mart, a good percentage of SMEs do know about JD Mart is that there was a campaign with Mr. Ranveer Singh as part of IPL. So as a result of all this, that conversation beginning becomes much easier. So all those things have a long-term benefit and may not necessarily translate into traffic on an immediate basis.
The next question is from the line of Varun Goenka from Nippon India Asset Management Company.
Congratulations for the...
Mr. Goenka, sir, there is disturbance coming from your line, sir.
Yes. So is my voice clear now?
Sir, I would request you to mute your line after your question so that the management can answer your question, sir.
Sure. Sure. Right. So congratulations for the milestone, definitely quite a -- so I wanted to understand Reliance Retail is also infusing cash in Just Dial, even though it already has INR 1,500 crores. So what this -- Just Dial will be holding a substantial amount of cash? What is the thought in terms of the areas of investments that we are looking at? What are the product capabilities that we're looking to build or how we're looking to further increase our distribution, et cetera? Anything update, Abhishek could help.
So yes, we would be holding about INR 3,700 crores cash post this equity inclusion. So there are multiple areas of investments we want to roll out certain great products that we have built over last several years. There could be newer products that we could be working upon. There would be investments in technology, in term street, online selling platform, et cetera. So in a nutshell, as I said that at this point of time, while we have entered into these agreements over the next few months is when we will be holding detailed discussions around this.
Sure. Sure. Right. I think then has leave nothing more to -- right. I'll get back in the queue. I look forward to the next few months. Thank you so much.
[Operator Instructions] The next question is from the line of Shyam Sundar Sriram from Sundaram Mutual Fund.
This is Sam. My first question is just related to the prior question. So much cash. Are we having any acquisition in this space? Is it towards any inorganic route that we may take with this cash on our balance sheet per se? Or do we want to continue to grow the JD Mart business organically? Any thoughts on that? And added to that, from an acquirer perspective, how do you see the -- what is the end goal of them, for JD Mart? Do they see JD Mart -- JD as the B2B vertical, which complements our existing initiatives on the B2C side? What are your thoughts on that front? These are the 2 questions from the acquisition perspective. I have one more question. I'll come back after this.
So Shyam, on your first question.
Sorry to interrupt Mr. Sriram, so there's a disturbance coming from your line. Request you to mute your line while the management answers your question.
So Shyam, on your first question regarding the possible usage of cash. Definitely, we shall work to organically grow the business. At the same time, if there are any organic opportunities which could have synergies with Just Dial, we would be open to evaluating. As I mentioned at this point of time, the focus would be to grow the business organically, be it Just Dial platform or JD Mart or any other newer initiatives. As far as the acquirers perspective is concerned, so as I mentioned earlier, there, the key thought process is that Just Dial has created a great asset in terms of 30 million listings. JD Mart platform is also shaping up well. So this particular partnership, both companies do think that they can [Audio Gap]
Mr. Sriram?
Yes. I'm here.
Am I audible?
Yes, sir. I think we lost the last 10, 15.
Yes. So I was saying that from acquirer's perspective as well, they do believe that JD has a growth asset in terms of 30 million listing days. JD Mart also is shaping up pretty well. So both companies would work to grow the SME ecosystem, and we are digitalizing SMEs. And detailed plans around the same would be finalized over the next few months.
Okay. That's good to hear. Sir, and my other question is on the employee headcount per se, employee count has been coming off compared to the '21 nor as '20 levels that is. So why is that the case? Are we seeing a very gradual pickup in terms of the new subscriber addition and hence we have proactively grown the employee headcount. Any thoughts on that?
See on employee head count, as you would appreciate that this particular quarter, especially the months of April, May, right, all of us were scrambling prioritizing safety of our employees. So we were not at all focused on, say, any incremental hiring, et cetera. So this is that in the month of June, we -- as our routine exercise had certain performance-related exit as well. So the thought process was that with this second wave hitting us hard, let us try to have as much automation in place and not look at immediately replenishing whatever attrition, et cetera is taking place. So going forward, with this second wave impact abating, we would look to, one, hire back the sales force that has gone down; second, also explore ways of reaching SMEs online via direct online sales.
Sir, your question is answered. Mr. Sriram?
Yes, sir. Sorry. So this is -- I'm sorry, I was on mute. So the employee reduction is more of a natural attrition, and we have not replaced them. That is how...
Yes. So this particular quarter, we did not go for any incremental hiring, plus there were certain performance-related exits as well. In future quarters, we should be back on track.
Sure, sir. Sir on JD Mart, where are we now? Any metrics that you can share in terms of the paying subscribers that are -- have come on board as compared to -- from the launch time? Or anything that you can share on the JD Mart, sir, that will be helpful.
So JD Mart -- on JD Mart, the first thing that we are doing is we are in the process of putting up a sales team. So some of those initiatives got delayed by a couple of months due to second wave impact. However, right now, we are in the process of putting up sales team for JD Mart. At the same time, on traffic side, pages are getting indexed as we speak. About 6.5 million, 7 million pages have already been indexed. So broadly, work is happening both on ramping up traffic and subsequently monetization as well.
The next question is from the line of Sudheer Guntupalli from ICICI Securities.
First question from my side. We know that Mr. Mani and the management team imposes immense trait in the company and its forward-looking growth prospects. So in that backdrop, we would have loved to see any potential partnership, let's say, from RIL side or any other prospective with their side, to kind of shape up in the form of primary infusion of growth capital into the company. So just a little curious as to why Mr. Mani decided to exit a significant part of his stake.
See, Sudheer, definitely, there is a INR 2,000 crore-plus primary infusion that is happening. So this transaction should be looked as a composite transaction, which has a primary component, which has a secondary component and there is an open offer as well. And as far as exiting or not exiting as Mr. Mani part is concerned, so he has put in 25 years building this particular business. Even after this particular stake sale, he would be at close to 10%, which is a very decent stake. And both parties shall work to grow the business here on.
Sure, Abhishek. Extension of Rishit's earlier question, just a little curious on why is the transaction happening at Reliance Retail level and not at geo-platform's level? Intuitively, one would have expected the transaction to happen at geo platforms level, right, for any synergies to materialize.
See, the entity is not that important. At the end of the day, it is the Reliance group with which we are partnering since Reliance Retail is more closer to SMEs that is why partnership with Reliance Retail.
So you are essentially saying that it's a little fluid, and it does not necessarily -- just because the legal entity acquiring us is Reliance Retail, it does not necessarily stop us from, let's say, exploring any possible synergies with geo-platform sort of a business.
So as I said, see, at the end of the day, we would continue to run as an independent listed company. And as far as synergies are concerned, which could help us exploit the SME opportunity in India better, those could be with any of the RIL growth companies.
Got it, Abhishek. Lastly, any thoughts on the branding of Just Dial and application hosting of Just Dial? Will the branding of JD and JD Mart remains status quo or will it change? Secondly, will the JD and JD Mart apps be hosted on a stand-alone basis or it will be hosted on My Jio also going forward?
So as I said, see, at this point of time, likely branding will remain as it is. Business would be run the way it has been done so far, along with the possibilities of growing it further and whether it will be part of My Jio platform, et cetera. Those are the kind of synergies that, over the next few months, we will figure out. So whatever will be in the best interest of for both parties, those steps will be taken.
Sure Abhishek. Just one last question, if I may. As of now, there is no thought about delisting the company, I'm assuming. Or is my assumption wrong?
No, there is no such thought.
The next question is from the line of Vivekanand from Ambit Capital.
Am I audible?
Yes, Vivek. Please go ahead.
Yes. So a bookkeeping question. Can you please help us with the split of the revenues and the campaign? That's question one.
So revenue and campaigns, broadly the split has been similar compared to previous quarters: Tier 2, Tier 3, about 35% on revenue contribution, about 55% on campaign contribution.
Okay. Sir, second question is on the shareholders' agreement that the 3 parties have signed, Just Dial, the family and Reliance Retail. If you could help us understand specifics of the governance on the use of cash, for example, dividend payout, treasury practices and decision-making on new outlay for new projects? Second thing is with respect to the Board composition, what does the SSA mention? And thirdly, with respect to accounting for projects under development. Right now, for example, we expensed the entire amount of spends that we undertake on JD Mart. Will that practice remain because these are assets that may have future economic benefits and therefore, they can also be recorded as -- in the balance sheet, right?
So Vivek, on your first question, usage of cash, management of treasury, dividend payouts, et cetera. So there, there aren't any specific covenants, et cetera which determine the same. At the end of the day, Just Dial, its Board, will decide how to best deploy that particular capital for an organic, inorganic growth or any such opportunities, and same will hold true for management of treasury as well. So net-net, the existing management will continue to take decisions as it was happening earlier. On the Board composition, definitely, the understanding is that the acquirer will have sole control. So they will have their representatives on the board in line with whatever other norms for board composition. And on your third question around accounting practices. So my understanding is that accounting is driven by Ind AS or the relevant accounting standards. There could be areas where you could actually take decisions spaces, how -- whether it can be capitalized or not. So I don't think so any of those decisions are dependent on the transaction. At the end of the day, the management, you have the statutory auditors. They will collectively go by whatever accounting standards say.
Yes. Just one small follow-up. So Mr. Mani will be the only representative of the minority -- I mean the -- currently, we have one nonpromoter but significant shareholder director and Mr. Mani's family members on the port. So how will that look like as far as the Board composition goes?
So as far as Board composition is concerned, Mr. Mani, since he'll be the MD and CEO, he will definitely be part of the Board. Rest of the Board composition will be decided as and when this particular transaction progresses. There isn't any specific hard and fast covenants to say that x members will be there or x members will not be there. Those particular details will be finalized as we go forward.
The next question is from the line of Keshav Lahoti from Antique Stock Broking Limited.
I want to understand, as because of COVID, JD Mart sort of has been delayed. So ideally, when should we expect the monetization to play out for JD Mart? And how the monetization will play out?
Okay. So on JD Mart, we are sort of clear that it's not that we want to rush into monetization. This particular platform is being built with the thought process that it should be the B2B platform for any Indian MSME over the next few years, which would, one, require traffic to be significantly ramped up. Second, on the monetization bid, we might want to offer a 30-day, 60-day, 90-day free trial to SMEs. So that is how we want to approach it. As far as monetization, et cetera, is concerned, as I mentioned earlier during my initial remarks that we are already in the process of putting monetization team. But we are very clear that we want to have a great product in terms of the content should be very comprehensive. We want to have as many rich pastel catalogs as possible. We want to give flavor to SME so that they should perceive this particular platform as a great platform for their business. And then monetization will obviously pick up. So 1 or 2 quarters of early or delayed monetization doesn't matter much in the broader scheme of things.
All right. Sure. With Reliance coming on the board, someone like Reliance is known for aggressive nature, if you take something like Reliance Jio. So do we -- should the aggressiveness of JD Mart will more increase going forward? Any plans of increasing ad spend?
So with the primary infusion, definitely, we would do whatever is needed to grow the business. Now whether that will entail aggressive spends on advertising or aggressive spends on putting feet on street to make SMEs aware about the platform et cetera. So all those we will sort of finalize over the next few months.
The next question is from the line of Abhilasha Satale from Dalal & Broacha.
I have a question on advertisement spend. So during the quarter, it has increased substantially because of the advertising during the IPL. So going forward, how do we see our advertisement spend for the rest of the year? Our quarterly run rate has been in the range of INR 20 crores to INR 25 crores. This quarter, it has been higher. So is it like most of, if we have spent additional because we were saying that INR 200 crores over the next 2 years. So how much will be there, additional for the rest of the year? This is my first question.
So Abhilasha, on ad spend that we had communicated during our previous earnings call that FY '20, we had spent about INR 65 crores. FY '21, we hardly spent about INR 3 crores, INR 4 crores. And FY '22, we had budgeted about double of FY '20, so about INR 120 crores, INR 130 crores. So first quarter, we have already spent about INR 50 crores. We have -- the original basis, original plan, we could spend another INR 70 crores, INR 80 crores for the rest of the year. Having said that, at this point of time, over the next few months, we shall be chalking out, working -- reworking on our strategy. And this is that, if any ad spend is to increase or decrease, those peaks will be done.
Okay. Yes. And how is the response post our advertising because most of the advertisement has been spent on the JD Mart awareness. In the last call, you had mentioned that download had increased to around 15,000 to 20,000 per day. So how is the situation currently? And with second wave receding, how much confidence we are going back to the active customer base of 5 lakh plus over, say -- over how many quarters do we see having that?
See, on response for JD Mart, one way by which we evaluate this responsiveness of customers when it comes to creation of digital catalog. So that response has been pretty good. Incrementally, it has become easier for our teams or our outsourced vendors to be able to create those catalogs because vendors are aware that this is the new B2B marketplace that has come up. So that way, the response I would attribute it to be quite well. On your second question around by when we would reach 5 lakh plus campaigns, as I mentioned, so things were on a recovering trajectory until March. And since a good percentage of our revenue comes from B2C segment SMEs, which were severely impacted both in the first and second wave of COVID, it is becoming a bit unpredictable. So hopefully, if there isn't further impact -- adverse impact due to subsequent COVID base, recovery should relatively be faster this time around. But we are assessing the situation on a monthly basis. So post-second wave, post-April and May, things are recovering. So I think the next couple of months will give better clarity on by when overall monetization and subsequently campaigns could pick up to pre-COVID levels.
The next question is from the line of Abhishek Bhandari from Macquarie.
Congrats, Abhishek. Congrats, Mani, if he's on the call. I think the deal will indicate the last 2.5 decades of hard work. So Abhishek, I had a couple of questions. First, if you could give the time line of the closure of the deal. And the way the pricing was arrived at. What -- the 1,020 -- how did you arrive at the price?
So firstly, on the time lines, we shall be holding AGM sometime in mid-August. And post shareholders approval, the primary tranche should get closed sometime in August end. Then as far as open offer time lines are concerned, open offer will take probably another 1 month -- 1 month, 1.5 months to close. And as far as pricing is concerned, the secondary tranche was obviously negotiated between the promoters and acquirer. And as far as preferential issue and open offer pricing is concerned that was basis SEBI's ICDR regulations, which govern both preferential pricing as well as open offer pricing. So there's a set formula, which gives a floor price basis, average price for last 2 weeks, 26 weeks, 60 days, et cetera, basis that there was a floor price. And the set price is higher than that particular floor price.
The reason for asking this question, Abhishek, is that ideally in such a large takeover scenario where the Reliance will -- practically will be only majority stake, shareholders would have assumed a controlling premium prevailing to the current market price. So I was curious what made Mr. Mani offer that at a discount and do the transaction.
See, one cannot look at pricing just from a very recent share price perspective. So one way to look at it could be that share price is currently at, say, 5-year high. In last 1, 1.5 years, not just for us, across companies, we have seen valuations swinging a lot. So the thought process of the Board, the company, promoters were simply that whether the valuation is reasonable enough and whether this particular strategic partnership makes sense and the basis that they decided to go ahead with it.
Sure. Got it. My second question, Abhishek, is that in the past, you guys have been known to be very frugal with cash, and that's probably reflected in you conserving cash and not really chasing growth in terms of traffic. Is it fair to assume that, that strategy might change, given that I would presume that broadly speaking on the tech side, your investment seems to be -- have been done. So unless you are going to acquire something big. So is it fair to assume that the bulk of this INR 3,500 crores, INR 3,200 crores on the cash post-August would be used in chasing growth and delaying the monetization of some of your new initiatives?
So Abhishek, I don't think it would be correct to say that we were frugal to the extent of sacrificing growth. We were always clear that we don't want to spend the INR 2 to get INR 1 revenue. So we were always adverse to giving cash backs discounts, which we felt were just instant gratification tools and were possibly not going to result in those users sticking for long term, et cetera. So going forward, obviously, we will do whatever is needed to grow the company. Just throwing cash possibly is not the right strategy. But there are several other ways of growing the business. For example, you can invest in your product and technology. Once you have a great product, you can obviously invest on advertising. You can invest on monetization in your sales team, feet on street, customer support. So there are multiple avenues to do that.
Got it. And Abhishek, my last question is throughout the call, you have been mentioning B2B platform being the primary focus of the transaction. I heard that phrase the most. So is it fair to assume that JD, with your B2C platform or your -- the other platforms like JD Expert, JD Omni, start taking a backseat and the focus becomes JD Mart? Or is it just you spoke about it because questions are more around that? I mean I'm just trying to understand which products of yours will become incrementally more in focus, given that most of the other ones actually are in a very nascent stage?
So no. So from my end, I did not specifically say that B2B is in focus. It -- probably it is a coincidence that since questions were centered around B2B that is how the inflation went. From our perspective, we are very clear that it is overall Just Dial that has to grow, both the B2C side and B2B side. B2C side would entail rollout of products, which would be, say, transaction-centric, then we have created this JD Omni platform over the last several years, which we believe that can do wonders in terms of digitalizing India's SMEs. And at the same time, we have created this parallel B2B platform. Probably because JD Mart is now launched that is why the focus on JD Mart is higher. But internally, we are clear that there'll be a separate team working on each of these separate products.
The next question is from the line of Mohit Motwani from HDFC Securities.
So my question was on the sales trend, which has come down. So I see that since Q3 of '21, right? So we have been trending down the sales trend significantly. So is this -- the reason for this is also the same as employee headcount that there's attrition and performance-related exits or something else? Because with your high advertising spends, I believe that you would be going -- you want to go aggressive on acquiring customers, right? So can you give some thoughts on why the sales trend has come down drastically?
So that was the thought process. Up until February, March, we wanted to aggressively ramp up our sales team in April, May. However, end of March or beginning April onwards, the second wave hit us extremely hard. So at that point of time, we said that it doesn't make sense to just push hiring. So let us prioritize safety of our employees. Secondly, since business or monetization was adversely impacted, we said that, okay, let us again work towards bringing in efficiencies. So all of that has been done. So going forward, we would work to grow sales team for Just Dial as well as -- as I mentioned earlier, we are putting up sales team for JD Mart as well.
Got it. So I understand that going forward, you will be having more of incremental hiring on the sales trend side, right? So as to push your offerings on JD Mart as well.
Yes. So our hiring requirements are more on sales side. Even on the sales side, we are working on how we can get part of our revenue directly online, instead of just depending on sales-assisted monetization. And for rest of the departments, yes, there could be certain hiring if need be on the technology content side. But yes, bulk of the requirements are likely to be on sales and monetization side.
[Operator Instructions] The next question is from the line of Vijit Jain from Citibank.
Congratulations on the deal, Abhishek. Abhishek, I just have one question remaining. When looking at your sales staff and the feet on street, do you think that trends where you have those, 4,000-odd people on the feet on street side, is that something that can be leveraged by Reliance to sell some of the other offerings to MSMEs directly? Should we think of them as relationship managers or not?
At this point of time, honestly, nothing of that has been thought through. So any kind of synergies would be up for acceleration, which could help Just Dial, which could help RRVL. So specifically, whether our feet on street can be leveraged or not, there hasn't been any specific thought around the same.
Just looking at JD Mart. And I know you already clarified on the monetization plan, long term, medium term, et cetera. I'm just wondering, over the next quarter or so in terms of investment focus in JD Mart, is that going to be largely on hiring new salespeople? Or is there more technology, product development and leadership recruitment plans also in the works there?
So both would be in focus investments to improve the product further. So as I mentioned, on JD Mart, we have already taken logistics of -- this is live on our mobile platform. We are also working to enable transactions on JD Mart. So whatever investments are needed to enable that all those will be done. As far as JD Mart monetization team is concerned that monetization team in the initial month shall also assist us with the content. So at the end of the day, these platforms, if you have a great content, content will drive traffic and traffic will ultimately drive monetization. So product building as well as content will be first area of focus. That should naturally result into traffic flowing in, which would ultimately lead to better monetization.
Okay. And sorry, Abhishek, just one final question. Just thinking about this balance between traffic and monetization. I know that within the B2B category, there can be a bit of an overlap between both buyers and sellers. But just trying to understand how does that work in terms of balance. As in you get a lot of traffic say from advertisement efforts, but a lot of listings on your platform are not paid for it. So is it that you're still saying those leads in the direction of those customers and then some months down the line, you can point to them. Is that how you're thinking about it by and large?
See, we already are monetizing from B2B customers on our JD platform. So those customers, if they have created digital catalogs, their products would get preference in search results. So they will be the first set of beneficiaries. So our existing customers, we want to ensure that they get even better value for money for the spend that we have done. So that next time whenever their renewals are due, we can rightfully ask for a higher amount. And then some of the lead sell also be passed on to quality vendors who have created risk catalog, though they might not be paying. And then over a period of time, once you know that these vendors are getting response from your platform, you can obviously get those vendors to pay a certain amount to continue getting those leads from the platform.
The next question is from the line of Pranav Kshatriya from Edelweiss.
My first question is regarding this JD Mart platform. Can you share how much is the traffic on JD Mart platform currently?
So Pranav, traffic-related stat, I think we would wait for maybe 1 or 2 quarters. Once we have decent traffic flowing in from Google, which would be a core source of traffic, it will be better to share specific metrics at that point of time.
Any statistics which you can share, let's say, the number of listings on the platform, number of photographs, which is competition to basically assess that where we are versus the competition. Because I believe that one needs to be at least some -- at least at par, if not better, to really drive the traffic and the monetization.
So from our platform perspective, what I can mention is that platform has about 30 million products, out of which about 1/3 plus are unique in nature. In terms of digital catalogs, we have rich catalogs for about 500,000 to 600,000 businesses, semi-rich catalogs for over 1 million such listings. So on the content side, the platform has shaped up pretty well.
Okay. And second question is on -- if I add up the stake, I think Mr. Mani and the Reliance Group as a whole, I think they'll end up holding almost 80% of the stake. So is it possible that somebody will have to share -- sell the stake? And Mr. Mani will further add it by 5% from his holding because promoter holding has to 75%?
So assuming full take up in open offer, the total stake of promoter would likely go to around 77.5% or so. So yes, it could be 2.5% higher versus 75%. But we shall evaluate in that particular scenario that which party actually sells to bring down the stake and over what time frame.
And Mr. Mani, I understand that he will be the Managing Director and the CEO. But will he also be the Chairman of the Board? Or there will be somebody else who will be the Chairman?
So even presently, the Chairman of the Board is Mr. B. Anand, who is one of the independent directors. So we will decide on in discussions with the acquirer that what exactly will be the Board composition. At the end of the day, Board collectively takes decision and it will be a completely professional Board as it has been today.
Yes. My last question is regarding -- on the cost side. So if you look at until last year, we were giving almost 100% of the free cash flow generated back to the shareholders because we are certain that there is no need for capital. And I believe that then also, you had this JD Mart platform, which was in the works and even the JD Expert and other platforms were in the works. So it's -- what exactly is changing where this incremental INR 2,000 crores is likely to be deployed? And -- so how should we see this money getting spent in the next few years for the growth of this platform?
So Pranav, unfortunately, for this question, you will have to wait for a few months. As I mentioned earlier that the transaction has just been announced, definite agreements have been entered into. Usage of cash, what all products will we focus on, which are the ones which will be aggressively pursued, et cetera. So we will decide over the next few months as and when we have the acquirer on our Board. That is when we would be able to articulate this better.
The next question is from the line of SivaKumar from Unifi Capital.
My query has been answered. Thank you.
Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to Mr. Abhishek Bansal for closing comments.
Thank you, everyone, for joining us. In case you have any further queries, please do reach out. We would do our best to address. That's it from myself. Thank you.
Thank you. On behalf of Nomura Financial Advisory and Securities that concludes this conference. Thank you for joining us, and you may now disconnect your lines.