Here's why shares of MapmyIndia operator C.E. Info Systems slipped 4% today

C.E. Info Systems, also known as MapmyIndia, shares slipped 4 per cent in Monday's trade on BSE and logged an intraday low at Rs 1,681.3 per share. Around 10:56 AM, CE Infosystems shares were down 3.12 per cent at Rs 1,699.15 per share. In comparison, the BSE Sensex was down 0.05 per cent at 79,763.09. 

 

The selling pressure in the stock came after the CEO and  Executive Director of MapmyIndia Rohit Verma stepped down from his post to float a new business-to-consumer (B2C) venture in which MapmyIndia will take a 10 per cent stake and provide additional funding of Rs 35 crore via compulsory convertible debenture (CCD) in the new company. 

 

"As the consumer business requires a dedicated focus to build Rohan Verma, CEO and Executive Director of MapmyIndia proposed to the board to fund a new venture outside the company," the filing read. 

 

It added that Rohan will continue to stay on the Board of MapmyIndia as a Non-Executive Director.

 

In the new company, Rohan will hold a 90 per cent stake while the balance 10 per cent will be with MapmyIndia. 

 

The proposed consumer business is said to complement and showcase MapmyIndia’s core market strength of business-to-business (B2B) and business-to-business-to-consumer (B2B2C) while focusing exclusively on the B2C segment. 

 

Furthermore, Mappls Mall and Travel which is in the incubation stage will be transferred to the new company along with Mappls gadgets for consumers marketed through D2C or e-commerce channels. 

 

MapmyIndia will have access to anonymised data collected by the Mappls app to improve MapmyIndia's map data. The new company will operate as an independent entity and bear all expenses related to its business be it people cost, marketing cost, and cloud cost.

 

MapmyIndia founders--Rakesh Verma and Rashmi Verma-- will have no part in the new company. 

 

C.E. Info Systems is an Indian technology company that specialises in mapping, location-based services, and geographic information systems (GIS). It was founded in 1995 by Rakesh Verma and Renu Soni. The company is best known for providing digital maps and location-based services across India and has built one of the most extensive digital mapping platforms in the country.

 

In December 2021, C.E. Info Systems went public and was listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), reflecting its growing prominence in the technology and mapping space.

 

In the past one year, C.E. Info Systems shares have lost 20  per cent against Sensex's rise of 18 per cent.