MapmyIndia slips 12% in 2 days as Rohan Verma exits as CEO to float new co

Rohan Verma's departure as CEO to set up a new venture could create a leadership vacuum, according to analysts

Shares of C.E. Info System-owned MapMyIndia dipped 8 per cent to Rs 1,546.20 on the BSE in Tuesday’s intra-day trade, extending its previous day’s fall in an otherwise firm market. The stock is trading close to its 52-week low price of Rs 1,545 that it touched on November 22, 2024.  In comparison, the BSE Sensex was up 0.7 per cent at 80,789 at 12:40 PM. Since November 8, in 16 trading days, the stock has tanked 25 per cent.

 

In two days, the stock of the software products company has declined 11 per cent after the company said Rohan Verma, CEO and Executive Director of MapmyIndia, will relinquish all his executive responsibilities at the company to float a new business-to-consumer (B2C) venture. MapmyIndia will take a 10 per cent stake in the new venture and provide an additional funding of Rs 35 crore via Compulsorily Convertible Debentures (CCDs) in the new company. CLICK HERE FOR RELEASE

 

 

Rohan Verma will hold 90 per cent stake in the new company while the balance 10 per cent will be with MapmyIndia. The CCDs will convert to equity either after 10 years or at a 25 percent discount to any third party valuation of the new company, whichever is earlier, the company said. It added that the future capital requirement will be taken up by the MapmyIndia board at appropriate time.

 

MapmyIndia 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). The company provides its digital maps, software products, platforms, application programming interfaces (APIs), IoT and solutions to new-age tech companies, businesses across industry verticals, automotive OEMs, government organisations, developers and consumers, under the Mappls MapmyIndia brand.

 

According to analysts at JM Financial Institutional Securities, MapMyIndia’s investments in the B2C segment (Mappls) were impacting margins, while diverting capital from B2B initiatives – IoT-led and Drone businesses. "Hiving off B2C efforts should therefore help the company sharpen its focus on B2B/B2B2C segments. The new entity could explore external fund raise, limiting investment requirements from the parent. This should improve MapMyIndia’s margin/ROCE profile," the brokerage firm said.  "Rohan’s departure as CEO could create a leadership vaccum. The company is confident that its leadership team, aided by Mr Rakesh Verma’s guidance, is capable enough. Stable, more predictable nature of B2B business lends credence of management’s assertion," the brokerage firm added.

 

Meanwhile, location services’ B2C business model is unproven. Besides, Google Map is a near monopoly (c. 80 per cent plus market share; Source: media), making chances of success remote. Minority stake in the B2C entity will preclude consolidation of losses, which could likely sustain in the foreseeable future, according to the brokerage firm.

 

The only grudge investors could have is Verma's departure from the CEO's role. The company believes they have the leadership depth to make up for Rohan’s absence. Relatively unexposed leadership cadre could however unnerve investors, the brokerage firm said, lowering target PER to 55x (from 62x) to reflect that.  Analysts however raised the company's FY26/27E margin estimates by c. 200bps, driving 5 per cent EPS uplift.  The recent correction and better H2 ahead make current levels attractive, analysts noted.