Must you put money into MapMyIndia(C.E. Data techniques restricted) IPO? – myMoneySage Weblog

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C.E. Info systems limited (MapmyIndia) incorporated on February 17, 1995, is a data and technology products and platforms company, offering proprietary digital maps as a service (“MaaS”), software as a service (“SaaS”) and platform as a service (“PaaS”). It is India’s leading provider of advanced digital maps, geospatial software and location-based IoT technologies. The company provides products, platforms, application programming interfaces (“APIs”) and solutions across a range of digital map data, software and IoT for the Indian market under the “MapmyIndia” brand, and for the international market under the “Mappls” brand.

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The company derives majority of their revenue from B2B and B2B2C enterprise customers. Its customers include marquee and renowned global tech giants, new-age consumer internet technology companies, leading automotive manufacturers, large businesses across industry segments such as BFSI, telecom, FMCG, industrials, logistics and transportation, and key government organisations. They had a combined workforce of 734 employees for their Indian and overseas operations as of March 31, 2021. They also have the benefit of marquee investors such as PhonePe, Qualcomm, and Zenrin.

Promoters & Shareholding:

Rakesh Kumar Verma and Rashmi Verma are the company promoters.

Pre Issue Share Holding 61.71%
Post Issue Share Holding 53.73%

Public Issue Details:

Offer for sale: OFS of approx. 10,063,945 equity shares of Rs. 2 aggregating up to Rs. 1,039.61 Cr.

Total IPO Size: Rs. 1,039.61 Cr.

Price band: Rs. 1000 – Rs. 1033.

Objective: To carry out the OFS and achieve the listing benefits.

Bid qty: minimum of 14 shares (1 lot) for Rs. 14,462 and maximum of 13 lots.

Offer period: 9th Dec 2021 – 13rd Dec 2021.

Date of listing: 21th Dec 2021.

Also read : Market Outlook – Dec’21

Pros:

  • India’s leading provider of advanced digital maps, geospatial software and location-based IoT technologies.
  • B2B and B2B2C market leader in India with a comprehensive suite of SaaS, PaaS and MaaS offerings capitalizing on early mover advantage.
  • Professional and experienced management team.
  • Strong financial performance.
  • Extensive product portfolio.
  • Marquee customers across sectors with strong relationships.

Cons:

  • Negative sentiments or downturn in global macroeconomic conditions will affect it customers which in turn will negatively affect the company’s business.
  • Liberalization of the digital mapping industry may increase its competition.
  • Exposed to exchange rate risks.

Subscribe or avoid?

Sectorial outlook – The total Indian addressable market of digital maps and location based intelligence services is expected to grow to Rs. 479.9 billion in 2025 at around 15.5% CAGR from 2019 to 2025, and most of this growth would be from new projects and policies announced by the GOI that encourages domestic players of digital maps and associated solutions.

The global IoT related software is expected to grow from Rs. 53.87 trillion in 2019 to Rs. 74.2 trillion in 2023 and this growth is fuelled by many drivers including increasing smartphone penetration, mobile app growth, innovation in offerings and government initiatives and this are expected have positive impact on the company and its business.

The financials (revenue and net profit) are shown in graph below:

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Valuation – For the last 3 years average EPS is Rs. 7.95 and the P/E is around 130x on the upper price band of Rs 1,033. The EPS for FY21 is Rs. 10.99 and the P/E is around 94x.if we look at the first 6 months ended at Sep-21 and annualize it to FY22 then the EPS is Rs. 17.56 and the P/E is around 58x. The company has no listed peers as per the RHP. The company P/E is between 130x and 94x makes the listing expensive.

Recommendation – The Company is debt free and operates in a sector with high entry barrier, also its profit margin has been increasing even though the revenue has been uneven. The GMP of Rs 795/- indicates a strong listing gains.

After considering all the factors we would recommend investors withan investment perspective as well as those who are looking at listing gains to “SUBSCRIBE” to this IPO.

Also read : All you need to know about RBI’s Retail Direct Scheme

Disclaimer:

This article should not be construed as investment advise, please consult your Investment Adviser before making any sound investment decision. If you do not have one visit mymoneysage.in now.

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