MapmyIndia Takes U-Turn On B2C Hive-Off, Shares Rally

After investors opposed MapmyIndia’s plan to hive off its B2C business, the geotech company has reversed its decision and decided not to make any equity or debt investment in the new entity, which was to be led by its outgoing CEO Rohan Verma. 

Besides, the company will retain its B2C brand Mappls. 

In an exchange filing on Monday (December 9), MapmyIndia said that its board has reversed its decision and will continue to “explore and evaluate” its B2C play by recalibrating its investment in the segment. 

“We believe that the decisions taken by the board on November 29, 2024 and today, December 9, 2024 both are taken in the best interest of the company and all its shareholders including minority shareholders. The company and the board believes it is important to ensure that the company goes above and beyond to allay any apprehensions,” MapmyIndia CMD Rakesh Verma and CEO & executive director Rohan Verma said in a joint statement. 

On November 29, MapmyIndia said that CEO Rohan Verma would be departing to start a new venture but will continue to be a non-executive director on the board of the company. MapmyIndia was to acquire a 10% stake in the new entity for an investment of INR 10 Lakh. Besides, it was also supposed to subscribe to compulsorily converted debentures (CCDs) worth INR 35 Cr of the new company. 

However, investors weren’t pleased with the company’s decisions. During an investor call on December 3, analysts and investors raised a number of questions about the transaction. 

• The spin-off of Mappls and its long-term impact on MapmyIndia’s financial health were the key concerns for the investors.
• Besides, they also question the diversion of capital and its potential impact on the company’s operational efficiency.
• The fairness of the terms of the deal and potential conflict of interest arising from Rohan’s continued presence on the board were also flagged. 

With the reversal, MapmyIndia said that it will retain the retail brand, Mappls, and the associated apps moving forward. “We remain on track to achieve our stated goals as articulated in our Investor Day in June, 2023,” it added

However, it is not clear if Rohan will continue in his role as the CEO of MapmyIndia. Inc42 has reached out to him to get more details and the story will be updated on receiving a response.

Meanwhile, shares of MapmyIndia surged to an intraday high of INR 1,945 after the company announced its decision today. This was an increase of over 18% from the previous close price of INR 1,646.60. 

It is pertinent to mention that the company’s shares fell to a 52-week low of INR 1,514.70 last week. The stock fell 5.89% last week. 

Shares of MapmyIndia ended today’s trading session 15.99% higher at INR 1,909.95.