MapmyIndia IPO: Qualcomm Eyes 20X Returns As It Offers Entire 5% Stake

As the MapmyIndia IPO is set to open on December 9, chip-making giant Qualcomm is likely to witness nearly 20 times returns against its investment into the digital mapping startup.

The startup has set the IPO price band at INR 1,000 – INR 1,033 per share. According to the red herring prospectus (RHP), the average cost of acquisition of shares by Qualcomm was INR 52.20 per share.

The US-based chipmaker will offload all of its current holding of 5.07% or 2,701,407 equity shares.

Qualcomm earlier held 8.48% stake in the company, however on November 25, it sold a part of its shares to the MapMyIndia chairman and managing director Rakesh Kumar Verma. PhonePe and Zenrin also transferred a part of the shareholding to Verma, the RHP showed.

During a media interaction on Monday, the company said that transfer took place according to agreements signed in 2015.

The Offer

C.E. Info Systems, the parent company of MapmyIndia, received the SEBI nod for its INR 1,040 Cr IPO last month.

The IPO consists of an offer for sale (OFS) of 10,063,945 shares. It does not include the fresh sale of shares by the company.

Since filing its draft red herring prospectus in September, the startup raised the offer size twice. In October, PhonePe-backed company had increased its offer size to 9,589,478 equity shares, from the initial offer size of 7,547,959 shares.

The major selling shareholders include promoter Rashmi Verma, who will offload up to 4,251,044 shares.

Japanese mapping major Zenrin, which holds a 8.78% stake or 4,673,719 shares, will sell up to 1,369,961 shares in the IPO.

Qualified institutional investors (QIB) would be offered up to 15% of the net offer – 5,031,972 shares.

Up to 3,522,381 shares or 35% of the offer will be given to the retail investors and up to 1,509,592 shares or 15% have been earmarked for the non-institutional investors.

Shareholding Pattern

• Promoters hold 53.72% stake in the company. The chairman and managing director of the company Rakesh Kumar Verma holds 43.50% stake 
• Till the filing of the addendum in October, Verma held a 17.66% stake. It increased after he bought 16.96% stake from PhonePe Singapore, 3.4% from Qualcomm and 7.03% from Zenrin on November 25
• Rashmi Verma, who is among the selling shareholders in the IPO, is part of the promoter group and holds a 17.66% stake. Verma, is the wife of Rakesh Kumar Verma and also the cofounder and chief technology officer of the startup
• The members of the promoter group include the CEO Rohan Verma and Rakhi Prasad, who owns 0.53% and 0.01% stake respectively. They are the children of Rakesh and Rashmi
• Flipkart-owned PhonePe India holds 19.15% in the company
• Zenrin and Qualcomm now own 8.78% and 5.07% respectively
• The only other shareholder with more than 1% stake in MapmyIndia is Nayan Arun Jagjivan, who holds 3.73% stake. Jagjivan is among the shareholders who would partly offload their stake in the public offering.

Recent Financials

Founded in 1995, C.E Info Systems is among the few tech-based profitable companies planning a stock market debut. In FY21, it posted a profit of INR 59.4 Cr, a 157% rise from INR 23.1 Cr profit it posted in FY20. The company’s total income swelled up to INR 192.2 Cr in FY21 from INR 163.4 Cr in FY20.

In the current financial year, during the April-September period, the company reported a net profit of INR 46.7 Cr, 161% higher than INR 17.8 Cr reported during the same period of the last fiscal (FY21).