MapmyIndia withdraws plan to invest Rs 35 crore in B2C venture amid concerns raised by minority shareholders

In a departure from the original plan, MapmyIndia's parent company CE Info Systems will not invest Rs 35 crore in its new business-to-consumer (B2C) venture being set up by its outgoing CEO Rohan Verma, he told ET.

"MapmyIndia's board approved investment of Rs 35 crore through CCDs (compulsorily convertible debentures)...but after hearing the concerns of minority investors, I have decided not to take the investment, and I'll use my own funds to run this venture," Verma said.

However, he said that MapmyIndia will still receive a 10% stake in the venture for a token amount of Rs 10 lakh.


"I want the benefits from this venture to accrue to MapmyIndia," Verma added.

On Monday, during an investor call, brokerages and analysts raised several concerns with the company's decision to hive off the B2C business, flagging the interests of minority shareholders.

MapmyIndia’s promoters own 52% stake in the company, while the remaining 48% is held by public shareholders. Fintech platform PhonePe is the largest minority shareholder and owns nearly 19% stake in MapmyIndia.

On Tuesday, the company's stock price ended 8.9% lower at Rs 1,538.65 on the BSE.

MapmyIndia, which is primarily a business-to-business (B2B) company that provides maps data to automotive companies, technology firms and other government clients, decided it will spin off its B2C operations into a separate venture that will be headed by Verma.

This would include its consumer app Mappls, which rivals Google Maps and a direct-to-consumer (D2C) vertical under which it sells gadgets such as vehicle trackers and dashboard cameras.

During the investor call, MapmyIndia’s chairman and managing director Rakesh Verma said that the company’s board had considered multiple options for the B2C business including setting up a separate subsidiary.

He said that the B2C business could impact the company’s margins, because of which it was considering various ways of minimising the impact. “The consumer business will adversely impact the P&L, leading to a decline in margins. In the past two quarters, we have been talking in investor calls about our interest to get into B2C… (but) the management was not getting any positive response,” he added.