MapmyIndia has decided to cancel its ₹ 35 crore investment plan aimed at the B2C sector after facing pushback from investors.
Citing investor objections, the parent company to MapmyIndia, CE Info Systems, has put on the backburner the ₹ 35 crore B2C venture being pushed by CEO Rohan Verma. This is after objections voiced by investors to an investment plan cleared by the board on November 29.
As defined by the new strategy, Verma would join the new business right after retirement from his executive position at CE Info Systems, but he would remain on the company’s board. The new venture, focused on a retail version of the MapmyIndia’s Mappls app, will not be linked to the CCD investment in MapmyIndia. Though MapmyIndia will retain 10% equity in the venture, the rest of the 90% will be held by Verma.
In a filing, Verma clarified that he would continue as a non-executive Director on the board of CE Info Systems w.e.f. April 1, 2025; his transition date. Verma and his family own 51.67% in MapmyIndia, with his father Rakesh Verma holding a 41.66% stake in the company.
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The board earlier sanctioned the acquisition of a 10% stake in the new venture for ₹ 10 lakh valuing the firm at ₹ 1 crore. The board also sanctioned additional funding of ₹ 35 crore in the form of Compulsorily Convertible Debentures.
According to Rakesh Verma, explaining in an investor call, the new B2C venture was decided after the evaluation of regulatory and financial performance factors. The royalty agreement between MapmyIndia and the new venture, especially regarding the usage of the Mappls app, has also raised concerns. Investors were of the view that there was a lack of transparency and fairness in the royalty agreement as it was reportedly not fair to the minority stakeholders.
For the second quarter of FY 2024, MapmyIndia has posted the consolidated profit at ₹ 30.35 crores, whereas for the fiscal year 2023-24, the profit has been recorded at ₹134.38 crores.
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