Shares of digital mapping company MapmyIndia nosedived over 4% during intraday trading to INR 1,681.30 apiece on the BSE

The decline in the share price came after the company’s board approved the demerger of its B2C business into an independent entity to focus solely on its core B2B and B2B2C businesses

Brokerage JM Financial slashed its target price to INR 2,810 while maintaining a ‘Buy’ call on the stock

Shares of MapmyIndia nosedived over 4% to INR 1,681.30 apiece on the BSE in early trading hours today (December 2) after the digital mapping company’s board decided to demerge its B2C business into an independent entity to focus solely on its core B2B and B2B2C businesses.

In an exchange filing, the geotech company said that its B2C business will now be undertaken by cofounder Rakesh Verma, who is set to step down from his role of CEO effective March 31, 2025.

Explaining the rationale behind the complete pivot to B2B and B2B2C, MapmyIndia said the consumer business is cash-intensive, one that “requires a dedicated focus to build”. The segregation, the company said, would allow it to focus on new growth opportunities without any distractions.

The digital mapping company plans to invest INR 10 Lakh to acquire a 10% stake in the new B2C venture floated by Verma at an initial stage. Further, it would infuse another INR 35 Cr in the form of compulsorily convertible debentures (CCDs).

“The CCD will convert to equity either after 10 years or at a 25% discount to any 3rd party valuation of the new company whichever is earlier,” the filing read.

Additionally, the company’s board has also approved an investment of INR 3 Cr to acquire 9.37% stake in SaaS platform for automobiles SimDaaS Autonomy Private Ltd, and an investment of INR 2 Cr to acquire 19.84% stake in location intelligence platform Kaiinos Geo Spatial Technologies Private Ltd.

Following the demerger announcement, brokerage JM Financial slashed its target price for MapmyIndia to INR 2,810 from INR 3,060 earlier while maintaining a ‘Buy’ call on the stock. This would imply an upside potential of more than 60% from the stock’s previous close.

“MapMyIndia’s investments in the B2C segment (Mappls) was 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 said.

The plans to segregate its B2C business come at a time when MapmyIndia is looking to  expand into newer markets, including South East Asia, North Africa and the Middle East.

The company posted a 8% year-on-year (YoY) and 15% quarter-on-quarter (QoQ) decline in its consolidated profit after tax (PAT) to INR 30.35 Cr in Q2 FY25. Operating revenue grew 14% YoY and 2% QoQ to INR 103.67 Cr during the quarter.

Shares of digital mapping company MapmyIndia nosedived over 4% during intraday trading to INR 1,681.30 apiece on the BSE

The decline in the share price came after the company’s board approved the demerger of its B2C business into an independent entity to focus solely on its core B2B and B2B2C businesses

Brokerage JM Financial slashed its target price to INR 2,810 while maintaining a ‘Buy’ call on the stock

Shares of MapmyIndia nosedived over 4% to INR 1,681.30 apiece on the BSE in early trading hours today (December 2) after the digital mapping company’s board decided to demerge its B2C business into an independent entity to focus solely on its core B2B and B2B2C businesses.

In an exchange filing, the geotech company said that its B2C business will now be undertaken by cofounder Rakesh Verma, who is set to step down from his role of CEO effective March 31, 2025.

Explaining the rationale behind the complete pivot to B2B and B2B2C, MapmyIndia said the consumer business is cash-intensive, one that “requires a dedicated focus to build”. The segregation, the company said, would allow it to focus on new growth opportunities without any distractions.

The digital mapping company plans to invest INR 10 Lakh to acquire a 10% stake in the new B2C venture floated by Verma at an initial stage. Further, it would infuse another INR 35 Cr in the form of compulsorily convertible debentures (CCDs).

“The CCD will convert to equity either after 10 years or at a 25% discount to any 3rd party valuation of the new company whichever is earlier,” the filing read.

Additionally, the company’s board has also approved an investment of INR 3 Cr to acquire 9.37% stake in SaaS platform for automobiles SimDaaS Autonomy Private Ltd, and an investment of INR 2 Cr to acquire 19.84% stake in location intelligence platform Kaiinos Geo Spatial Technologies Private Ltd.

Following the demerger announcement, brokerage JM Financial slashed its target price for MapmyIndia to INR 2,810 from INR 3,060 earlier while maintaining a ‘Buy’ call on the stock. This would imply an upside potential of more than 60% from the stock’s previous close.

“MapMyIndia’s investments in the B2C segment (Mappls) was 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 said.

The plans to segregate its B2C business come at a time when MapmyIndia is looking to  expand into newer markets, including South East Asia, North Africa and the Middle East.

The company posted a 8% year-on-year (YoY) and 15% quarter-on-quarter (QoQ) decline in its consolidated profit after tax (PAT) to INR 30.35 Cr in Q2 FY25. Operating revenue grew 14% YoY and 2% QoQ to INR 103.67 Cr during the quarter.