The proposed entity will house a retail version of the company's Mappls app.
Digital navigation firm CE Info Systems, which operates under the MapmyIndia brand name, has shelved its decision to invest Rs 35 crore in a proposed B2C venture to be led by CEO Rohan Verma.
As per the company's board, Verma will take charge of the new venture after relinquishing his responsibilities at CE Info Systems. However, he will continue to be on the board of CE Info Systems.
The decision comes after concerns were raised on the investment plan approved by the company's board on November 29.
"To allay the concerns of minority shareholders, the new company shall not take MapmyIndia's CCD investment. MapmyIndia will still get a 10 per cent equity stake in the new company," Verma said on Tuesday.
The proposed entity will house a retail version of the company's Mappls app.
As per the approval, Verma will hold the rest of the 90 per cent stake in the new company.
He will relinquish all executive responsibilities in the company and continue to be on the MapmyIndia board as a non-executive Director with effect from April 1, 2025, the company said.
Verma along with his family members hold a 51.67 per cent stake in MapmyIndia with 41.66 per cent held by his father Rakesh Verma, co-founder and Chairman & Managing Director of the company.
The company's board had earlier approved acquisition of a 10 per cent stake in the new B2C venture for Rs 10 lakh -- valuing the proposed firm at Rs 1 crore. Besides, the board had approved an additional funding of Rs 35 crore via Compulsorily Convertible debentures in the new venture.
During the investor call on Tuesday, Rakesh Verma said the decision to form a B2C venture and its structure was taken after evaluating various options on the regulatory and financial performance scale.
When investors questioned the absence of royalty agreement with the proposed venture as it will use Mappls app developed by the company, the MapmyIndia management said that the call on such an agreement will be taken after 5 years.
An investor representative said there is no transparency in the agreement between the MapmyIndia and the proposed venture and terms between the two are also not fair in the interest of minority investors.
Similar concerns were raised by other investors as well.
MapmyIndia had posted a consolidated profit of Rs 30.35 crore in the second quarter ended September 2024 and Rs 134.38 crore in the financial year 2023-24.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)