C E Info Systems dropped 8.34% to Rs 1548.40, extending losses after the company said it will buy stake in a B2C company floated by its CEO Rohan Verma.
MapmyIndia's stock price has declined by 11.71% over the two trading sessions following the announcement of its B2C business spin-off. This move has drawn criticism for its lack of transparency. The spin-off is considered a related-party transaction, raising concerns about its fairness to public shareholders.C E Info Systems (MapmyIndia) announced on 1 December 2024, that will to continue focusing on its core B2B and B2B2C businesses. Rohan Verma, CEO and executive director, MapmyIndia will float a B2C new venture. MapmyIndia will take 10% stake and provide an additional funding of Rs 35 crores via CCD in the new company. The CCD will convert to equity either after 10 years or at a 25% discount to any 3rd party valuation of new company whichever is earlier.
Verma will relinquish all executive responsibilities in the company and continue to be on the MapmyIndia board as a non-executive director (w.e.f. April 1, 2025) In sync with the companys strategic initiatives to support and nurture innovative businesses.
The new company will be using the MapmyIndias retail brand Mappls, whereas Mapmyindia which uses the brand for its B2B2C and B2G2C offerings will continue to have access to the same. 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 entity. They will be completely focused on building MapmyIndia and have no other interests beyond MapmyIndia.
The consumer business which is a cash consuming business will not affect MapmyIndias books, since MapmyIndia will be a minority stakeholder in the newly formed, independent entity.
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C E Info Systems is India's leading deep-tech digital map data, geospatial software and location-based IoT products, platforms, solutions and APIs company, offering proprietary digital maps as a service ("MaaS"), software as a service ("SaaS") and platform as a service ("PaaS").
On a consolidated basis, net profit of C E Info Systems declined 8.20% to Rs 30.33 crore while net sales rose 13.82% to Rs 103.67 crore in Q2 September 2024 over Q2 September 2023.
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