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: Issue Highlights
|
Fresh issue (in Rs crore)
|
-
|
Offer for sale (in Rs crore)
|
1039.6
|
Offer for sale (in number of shares)
|
|
- in Upper price band
|
10063945
|
- in Lower price band
|
10063945
|
|
|
Price Band (Rs)
|
1000-1033
|
For Fresh Issue Offer size (in no of shares)
|
|
- in Upper price band
|
|
- in Lower price band
|
|
Pre issued capital (Rs crore)
|
|
Post issue capital (Rs crore)
|
|
- in Upper price band
|
10.64
|
- in Lower price band
|
10.64
|
Pre issue promoter and Promoter Group shareholding
(%)
|
61.71%
|
Post issue Promoter and Promoter Group shareholding
|
|
-On higher price band (%)
|
53.73%
|
-On lower price band (%)
|
53.73%
|
Bid Size (in No. of shares)
|
14
|
Issue open date
|
09/12/2021
|
Issue closed date
|
12/12/2021
|
Listing
|
BSE, NSE
|
Rating
|
50/100
|
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
|