MapmyIndia reverses decision to make equity/debt investment in new company
The company’s decision comes days after it said it would make a Rs 35 crore investment in outgoing CEO Rohan Verma’s B2C venture.
MapmyIndia on Monday informed public bourses that it has reversed its decision to make any equity or debt investment into the proposed business-to-consumer (B2C) venture of its outgoing CEO, Rohan Verma
The company’s decision to go back on its announcement comes after investors and industry experts criticised the investment structure of the new entity.
According to the filing, CE Info Systems, MapmyIndia's parent company, was planning to invest in this new venture through two channels—first taking a minority 10% stake for Rs 10 lakh, and then providing a much larger investment of Rs 35 crore through compulsory convertible debentures. This meant Verma would retain 90% ownership of the venture while accessing significant funding from the listed company.
However, the board has now said that it will continue to explore and evaluate various opportunities for its new business while re-calibrating its investments in the B2C segment.
“We believe that the decisions taken by the Board on 29th November 2024 and today, 9th December 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,” said Rakesh Verma, the company’s Chief Managing Director and Rohan Verma.
However, YourStory had previously reported market watchers observing that reversing the investment wouldn't wash away the stains on the company's reputation or fix its deeper governance problems.
The company had disclosed its intention to reverse the investment to media outlets before informing stock exchanges, a move which also heightened scepticism from experts.
However, the reversal has brought a much-needed recourse to the company’s share price, which surged by 16.3% to close at Rs 1,909.95 on BSE today.
The shares of the company had hit a 52-week low of Rs 1,534 on December 3, a day after it discussed its move in a conference call.
Edited by Kanishk Singh