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MapmyIndia’s grey market premium is at ₹900 — here’s all you need to know about the business

MapmyIndia’s grey market premium is at ₹900 — here’s all you need to know about the business
Stock Market1 min read
  • It intends to raise ₹1,040 crore IPO, giving partial exits to MapMyIndia’s cofounder Rashmi Verma and Qualcomm.
  • The price band for the public issue has been fixed at ₹1,000-₹1,033 and the lot size has been set at 14 equity shares.
  • MapMyIndia competes with other global giants such as TomTom, Here Technologies, MapBox, Google Maps, ESRI, Trimble and more.
CE Info Systems — the parent company of MapmyIndia — opened its initial public offering (IPO) for subscription on Thursday, December 9.

The company was founded in 1995 by Rakesh and Rashmi Verma, and it is currently led by Rohan Verma. The company builds digital map data, telematics services, location-based software-as-a-service (SaaS) and geographic information system (GIS) services.

“MapMyIndia is essentially a business-to-business (B2B) and business-to-business-to-customer (B2C) platform,” MapmyIndia’s chief executive (CEO) Rohan Verma highlighted. The company has over 500 customers, including PhonePe, Flipkart, Yulu, HDFC Bank, Airtel, Hyundai, MG Motor, Avis and Safexpress as its customers.

It has also partnered with the government of India for Pradhan Mantri Gram Sadak Yojana, (PMGSY), Rural Housing (RH) Sampoorna Gramin Rozgar Yojana (SGRY) and Swaranjayanti Gram Swarozgar Yojana (SGSY) and other schemes. It is working on projects with the Central Board of Direct Taxes (CBDT) and Goods and Services Tax Network (GSTN) in mapping direct and indirect tax sources in the country.

The offer

The offer
BI India

The company intends to raise ₹1,040 crore IPO through offer for sale (OFS), giving partial exits to MapMyIndia’s cofounder Rashmi Verma, Qualcomm Asia Pacific, Zenrin and others. The company’s stakeholders are looking to sell 1,00,63,945 equity shares.

The price band for the public issue has been fixed at ₹1,000-1,033. The lot size will be of 14 equity shares and in multiples of 14 shares thereafter. Retail investors will have to shell out at least ₹14,000 to buy one lot.

MapmyIndia’s IPO was oversubscribed by two times on the first day of listing on December 9, with retail subscribers taking the biggest bite.

​MapmyIndia is not making money on this IPO

​MapmyIndia is not making money on this IPO
Canva

Since the IPO is completely an OFS, the proceeds will directly go to the shareholders selling their stake. Rohan, in an interview with Business Insider, highlighted, “We are a highly profitable cash generating company… For the business, it is not currently required to infuse capital into the company.”

“We wanted to go public because we wanted to impact the industry and be able to take on larger projects from customers and have access to public market capital as and when the opportunity arises,” he added.

How does MapMyIndia earn?

How does MapMyIndia earn?
BI India

MapMyIndia reported a revenue of ₹152 crore from its operation in fiscal year 2021 and its net profit was around ₹59 crore. In the first half of FY2022 — between April to September 2021 — the company’s revenue was at ₹100 crore and net profit was at ₹46 crore.

The company derives majority of the revenue from B2B and B2B2C enterprise customers. “The business model is to charge the customer fees per period based on per vehicle, per asset, per transaction, per use case or per user basis, as applicable,” Ashika Stock Broking Limited highlighted in their latest report.

These above-mentioned charges are spread across subscription fees, royalties or annuities for licences and usage rights to the proprietary digital Mobility-as-a-Service (MaaS), Product-as-a-Service (PaaS) and Software-as-a-Service (SaaS) offerings.

This contributed nearly 90% of MapmyIndia’s operation revenue for FY21 and over 93% of the revenue from operation for the first half of FY22.

Should you subscribe or not?

Should you subscribe or not?
BI India

“MapmyIndia being a pioneer, has certain advantages as its digital maps and other solutions are localised for the challenging Indian geography and are extensive in terms of coverage. There is scope of further up selling or cross selling while the maps and platform are constantly updated with validated feedbacks [sic] which can create network effect [sic],” said a report by Angel One.

Manoj Dalmia, founder and director at Proficient Equities, said that one may subscribe to MapmyIndia for listing gains considering its grey market price (which is at ₹900, as on December 10) and client base. Usually, shares that demand a huge premium till the last day of the IPO tend to give higher gains on the day of listing.

Who is it competing with?

Who is it competing with?
Canva

MapMyIndia competes with other global giants such as TomTom, Here Technologies, MapBox, Google Maps, ESRI, Trimble and more. The company too has a global ambition, and is currently available in India, Japan, USA, among other countries.


“MapMyIndia seek [sic] to continuously enhance the scope and quality of the existing offerings to further differentiate them from the competition. The company will continue to build a deeper and broader stack of software products in a modular platform and API-driven manner to increase use cases and adoptability of the products and offerings by an ever-increasing addressable market,” Ashika Stock Broking Limited said in their report.

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