C.E. Info Systems is a data and technology products and platform company, offering proprietary digital maps as a service ('MaaS'), software as a service ('SaaS') and platform as a service ('PaaS'). The company is one among the leading providers of advanced digital maps, geospatial software, and location-based Internet of Things (IoT).

It provides products, platforms, application programming interfaces (APIs) and solutions across a range of digital map data, software, and Internet of Things (IoT) for the Indian market under the 'MapmyIndia' brand and for the international market under the 'MAPPLs' brand.

Having pioneered in digital mapping in India in 1995, the company has earned market leadership position in the industry.

As of Sep 31,2021, the company has serviced over 2,000 enterprise customers since its inception. In Financial Year 2021, the company had over 500 customers on its software as a service, platform as a service and maps as service platforms. 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 organizations. Some of its customers include PhonePe, Flipkart, Yulu, HDFC Bank, Airtel, Hyundai, MG Motor, Avis, Safexpress and Goods and Service Tax Network (GSTN).

 

The company's offerings include digital maps and geospatial data products which use proprietary end to end technology-driven and artificial intelligence assisted mapping systems and processes for digital geospatial data acquisition and processing as well as digital map data productization and dissemination. The company provides foundational and comprehensive digital maps across India. The company has also started to build and release digital maps for countries outside India, such as Sri Lanka, Bangladesh, Nepal, Bhutan, Myanmar, UAE, and Egypt.

 

The company's platform and internet of things products include map, location and navigation platforms; geographic information system, geospatial and geo artificial intelligence products and platforms; location-based internet of things, fleet and workforce automation products and platforms; developer application programming interface, 'MapmyIndia' Move app, websites and move gadgets; N-case automotive and mobility tech solutions suite and location-powered consumer tech and enterprise digital transformation.

 

The company's digital maps comprehensively cover India, and as on Dec 02,2021, its digital maps cover 6.29 million kilometres of roads in India, representing 98.50% of India's road network which was 6.39 million kilometres as on March 31, 2019, on a provisional basis as per the Annual Report of the Ministry of Road Transport & Highways, Government of India for the year 2020-2021. As on Dec 02,2021, its digital map data provides location, navigation, analytics, and other information for 7,933 towns, 6,37,472 villages, 17.79 million places across many categories such as restaurants, retail shops, malls, ATMs, hotels, police stations and electric vehicle charging stations and 14.51 million house or building addresses. Its artificial intelligence (AI) powered, four-dimensional ('4D'), high-definition ('HD'), information-rich ('IR') multi-lingual, hyperlocal digital map twin digitally and geospatially represents the dynamically changing real world in near real time. Its 'RealView' maps provide actual roadside and on-ground views based on over 400 million geo-referenced photos, videos and 360-degree panoramas across India. Although its core business focuses on the Indian market, its geospatial software and location-based internet of things platforms, products, application programming interfaces and solutions are geography and data agnostic, enabling the company to offer global solutions.

 

 

The company provides its products and platforms to consumer tech companies and enterprises across industry verticals. It offers a suite of digital maps and software as a service, platform as a service, application programming interface and solutions in the areas of location intelligence, geospatial analytics, geographic information systems (GIS), digital automation and artificial intelligence, to its customers which they can embed into their consumer facing apps and leverage for their digital transformation initiatives.The total market for Indian digital map services is expected to grow from US$ 1.7 billion (Rs 126.14 billion) in 2019 to US$ 4.2 billion (Rs 311.64 billion) in 2025 at a CAGR of 16.1% between 2020 and 2025.

 

The company's Automotive and Mobility technology provides services to original equipment manufacturers of four-wheeler, two-wheeler, commercial vehicles, electric vehicles as well as organizations involved in people and goods transportation, mobility, and logistics. The company offers them its suite of digital maps and software as a service, platform as a service, application programming interface, internet of things and solutions in the areas of N-CASE mobility (Navigation, connected vehicle, Autonomous safety and advanced driver assistance systems, Shared mobility and Electric mobility), telematics, fleet management and logistics optimization, which they can embed into their new vehicles and integrate with their existing fleets of vehicles. The company's offerings help its business to business to consumer(B2B2C) and business to business(B2B) customers to increase the value and benefits of their vehicles to their owners, drivers, and passengers, and help them in moving people and goods in a faster, safer and cheaper manner.The total market in India for navigation solutions and telematics market is expected to grow from US$ 20.5 billion (Rs 1.52 trillion) in 2020 to US$ 44.9 billion (Rs 3.33 trillion) in 2025 at a CAGR of 15.4% from 2019 to 2025

 

 

The company derives majority of its revenue from business to business and business to business to consumer enterprise customers. Its business model is to charge its customers fees per period based on per vehicle, per asset, per transaction, per use case, per user, as applicable. These take the form of subscription fees, royalties, annuities in return for providing licenses and usage rights to its proprietary digital maps as a service, software as a service and platform as a service offering. Subscription fee, royalty and annuity payments together contributed over 90% of the company's revenue from operation for FY 2021.

 

 

The company is promoted by Mr Rakesh Kumar Verma and Ms Rashmi Verma.

Rakesh Kumar Verma has a bachelor's degree in mechanical engineering (hons.) from the Birla Institute of Technology and Science, Pilani and has a master's degree of business administration from the Eastern Washington University, USA. Before co-founding the company, he has worked for 10 years in the USA from 1979-1989 in various organisations in various business functions and as faculty, including in EDS (General Motors).

Rashmi Verma has a bachelor's degree of chemical engineering from the University of Roorkee and has a master's degree of science from the Eastern Washington University, USA. Prior to founding the company, she has worked in the U.S.A., including with the IBM Corporation till 1988.

Objects of the offer

The offer comprises an offer for sale by selling shareholders Ms Rashmi Vermaof up to 40,93,377 equity shares aggregating Rs439.1cr at upper price band, Qualcomm Asia Pacific Pte Ltd of up to 27,01,407 equity shares aggregating Rs279.1cr at upper price band, Zerin Co Ltd of up to 13,36,961 equity shares aggregating Rs141.5cr at upper price band and other selling shareholders of up to 17,41,533 equity shares aggregating Rs 179.9 cr at upper price band.

 

Rashmi Verma's pre-issue shareholding was 17.66%, which shall decrease to 9.68% at the upper price band of Rs 1033.Qualcomm Asia Pacific Pte Ltd's pre-issue shareholding was 5.1%, which shall become nil at the upper price band of Rs 1033.Zenrin Co., Ltd's pre-issue shareholding was 8.8%, which shall decrease to 6.2% at the upper price band of Rs 1033.

 

Strengths

The company caters its products and services to large and rapidly growing total addressable market. The total market for Indian digital map services is expected to grow from US$ 1.7 billion (Rs 126.14 billion) in 2019 to US$ 4.2 billion (Rs 311.64 billion) in 2025 at a CAGR of 16.1% between 2020 and 2025. Further, the total market in India for navigation solutions and telematics market is expected to grow from US$ 20.5 billion (Rs 1.52 trillion) in 2020 to US$ 44.9 billion (Rs 3.33 trillion) in 2025 at a CAGR of 15.4% from 2019 to 2025

 

The company pioneered digital mapping in India in 1995 and has earned its leading market position today in the business to business and business to business to consumer market for digital maps and location intelligence technologies and services by capitalizing on its early mover advantage, creating a niche market, developing proprietary and integrated technologies, full stack product offerings, continuous innovation, and robust sustainable business model.

MapmyIndia has some clear advantages in the context of business in India, that are not easily replicable, putting up high barriers to entry in the map and navigation business in India. MapmyIndia has a big head-start compared to any other existing player or potential entrant, and has made substantial investments in technology including hardware, software, and packages over the years. As its products and solutions specifically localized for a challenging geography like India, which has a high level of complexity, dynamic and constantly evolving nature of geographical expanse, also provides MapmyIndia with a base and preparedness to offer robust offerings for the global market as well, having covered a challenging geography like India under its belt. Its technological capabilities of building and offering platforms, application programming interfaces, products, and solutions which integrate and leverage its high-quality maps, have furthered its ability to grow its business as well as grow the value of its products.

 

The company offers the most comprehensive, detailed and accurate digital map database for India, and also offers the widest range of location-powered software and IoT-enabled technologies compared to its peers. The company provide a combined offering of map data, location content and platform through one integrated system.

The company has been present in the Indian market for over 25 years and has leading enterprises including global and Indian tech giants and upcoming start-ups, multi-national and domestic businesses across industry verticals, automotive OEMs, and key government organisations across the central, state and local level, as its customers. The company enjoy a strong brand recall in the B2B and B2B2C segments of mapping technologies.

The company is an independent map, geospatial and location-based internet of things technology company which positions to work with various partners across industries. The independent nature of the company allows it to freely innovate for its customers. The data which the company collects is used to provide direct value to its customers and users. With its products, the company enables its customers to leverage and deliver location and navigation products that meet the demand in their own markets. Additionally, the company is to provide its solutions over the cloud, as well as through hybrid and in-premise deployments.

The company follows a customer first approach which has helped the company in developing strong and long-standing customer relationships and created upselling and cross selling opportunities. The company typically enters long term contracts of 3-5 years duration which are mutually renewable, thereby providing continued synergy and revenue predictability with company's customers. Many of the company's customers are leading market players and renowned brands in their respective fields such as Hyundai, MG Motor, PhonePe, Flipkart, GSTN, AVIS, Safexpress, Airtel, HDFC Bank, and Yulu and its strong relationship with them help the company to up-sell and cross-sell.

 

Since most of the company's products, platforms and solutions are digital, created in-house, and then deployed and delivered over the cloud, the company as a business is asset light, with relatively low variable cost base. This enables it to have a high operating leverage in the business. For the FY 2021, the company's contribution margin was 83%, EBITDA margin was 35% and PAT margin was 31%. Further, the company had healthy return ratio with RoCE (ex-cash and financial investments) of 50%, 41% and 110% for financial years 2019,2020 and 2021.

The liquidity of the company was also comfortable coupled with healthy operating cash flow generation. The cash and liquid investments stood at Rs 369.6 cr. Cash flow from operations for six months ended September 2021 stood at Rs 17.95 crore and for FY2021 stood at Rs 83.28 crore

 

 

Weaknesses

 

 

 

The company earns around 52% of its revenues from automotive and mobile technology. Any adverse impact on the automotive segment can impact the business of the company.

 

The number of customers that accounted for 80% of its revenue from operations were 17, 22, 25 and 18 in Financial Years 2019, 2020 and 2021 and in the six months period ended September 30, 2021, respectively. Loss of any major customer, thus, can adversely affect its growth prospects.

 

The company's inability to maintain or update its map database or errors in its map database could harm its reputation or adversely affect its ability to sell its products and services

 

The company is dependent on the success of its research and development (R&D) and the failure to develop competitive new or improved products and services or process improvements or updated map data could adversely affect its business, financial condition and results of operations and have a negative impact on its competitive position.

 

The company's inability to protect its intellectual property or any third-party claims in relation to infringement of intellectual property rights or in the future could adversely affect its business, reputation, financial condition, results of operations and cash flows.

 

GPS-based navigation products that can record a person's location could raise privacy concern in public. Increased government regulations such as data privacy may place additional burden on the company's business and growth.

 

If the company suffers a cyber security breach or other security incident or unauthorized parties otherwise obtain access to its customers' data or its own data, the company's platform and products may be perceived as not being secure. As a result, reputation may be harmed, demand for its platform and products may be reduced and it may incur significant liability.

 

 

Liberalization of digital mapping industry may increase competition and the company's inability to compete effectively may result in loss of customers and its market share.

 

The company relies on telecommunications and information technology systems, networks, and infrastructure to operate its business and any interruption or breakdown in such systems, networks or infrastructure or the company's technical systems could impair its ability to effectively operate its platforms or provide its products and services.

 

Valuation

For six months ended Sep 2021, consolidated sales were up by 81.3% to Rs 100.03 crore. OPM rose 2512 bps to 45.24% which led to 307.7% increase in operating profit to Rs 45.25 crore. Increase in awareness and adoption led to healthy growth in revenues and margins. Other income increased 20.2% to 22.55 crore while interest cost declined 17.6% to Rs 1.08 crore and depreciation declined 19.5% to Rs 3.87 crore. PBT increased by 164.9% to Rs 62.85 crore. Tax expenses increased by 174.2% to Rs 16.08 crore. Net profitstood at 46.77 crore as against net profit of Rs 17.86 crore.

 

For FY 2021, consolidated sales were up by 2.6% to Rs 152.46.  OPM rose 1397bps to 33.72% which led to 75.1% increase in operating profit to Rs 51.41 crore. Revenues of the company were impacted in first half of FY2021 due to Covid-19. Other income increased 168.1% to 39.81 crore while interest cost declined 9.8% to Rs 2.56 crore and depreciation increased 1.3% to Rs 9.9 crore. PBT increased by 149.3% to Rs 78.77 crore. Tax expenses increased by130.1% to Rs 19.33 crore. Net profitstood at 59.43 crore as against net profit of Rs 23.50crore.

 

At the higher price band of Rs 1033, the offer is made at around 62.26 times TTM EPS of Rs 16.59and 26.37 times September2021 EV/TTM sales.There are no listed peers for the company in India.

 

 

 

 

CE Info Systems: Consolidated Financials
	1903 (12)	2003 (12)	2103 (12)	2009 (6)	2109 (6)
Sales	135.26	148.63	152.46	55.18	100.03
OPM (%)	18.86	19.75	33.72	20.12	45.24
OP	25.50	29.35	51.41	11.10	45.25
Other inc.	28.08	14.85	39.81	18.76	22.55
PBIDT	53.58	44.20	91.22	29.86	67.81
Interest	2.63	2.84	2.56	1.32	1.08
PBDT	50.95	41.37	88.66	28.54	66.72
Dep.	9.15	9.77	9.90	4.81	3.87
PBT Before EO	41.80	31.60	78.77	23.73	62.85
Exceptional items	0.00	0.00	0.00	0.00	0.00
PBT After EO	41.80	31.60	78.77	23.73	62.85
Total Tax	8.24	8.40	19.33	5.87	16.08
Net Profit	33.57	23.20	59.43	17.86	46.77
EPS (Rs)*	6.30	4.36	11.16	6.71	17.57
*EPS is calculated based on post issue share capital of Rs 10.64cr at upper price band, Face Value Rs 2
Figures in Rs crore
Source: Capitaline Corporate Database