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MapMyIndia IPO: A closer look into expansion plans, PDP Bill concerns, and pending litigation with Centre

The company’s DRHP also reveals details on its profit margin for FY2021, COVID-19 impact, and plans for the future.

CE Info Systems, the owner of digital map maker MapmyIndia, has filed a draft red herring prospectus (DRHP) for a Rs 1,200 crore initial public offering (IPO). The IPO consists of a sale of 75.5 lakh shares by its existing shareholders and promoters, including investors Qualcomm Asia Pacific, Japanese map maker Zenrin,

“The objects of the Offer are to carry out the Offer for Sale of up to 7,547,959 equity shares by the Selling Shareholders and achieve the benefits of listing the Equity Shares on the Stock Exchanges,” the DRHP read. At the time of the filing of the DRHP, PhonePe holds 36.11 percent of equity shares on fully diluted basis and Zenrin invests 17.82 percent, it said.

Key takeaways

  • Total Indian addressable market of maps and location-based intelligence services expected to grow to $7.74 billion in 2025
  • This industry is expected to grow at the compounded annual growth rate (CAGR) 15.5 per cent from 2019 to 2025
  • MapMyIndia registered Rs 192 crore as of March 31, 2021
  • The company’s profits doubled in FY2021 to Rs 59 crore from Rs 23 crore in FY2020.

Background: The company was founded in 1992 by siblings Rakesh and Rashmi Verma. It claims to have a 90 per cent market share in the automative space. It claims to have BMW and TATA as its clients, apart from tech companies such as Apple and Amazon.

What do they intend to do with the investment?

Build broader stack of software: MapMyIndia in the DRHP said it plans to increase the range of its digital maps and geospatial data products both in terms of geographical coverage, as well as in terms of features and functionalities. “Our Digital Map Twin of the Real World, which is an AI-powered 4D, HD, information rich map that digitally and geospatially represents the real world in near real-time, is a never ending exercise, that will help us build and own an asset that will continue to be increasingly valuable and monetizable for an expanding set of use cases in the future,” it claimed.

Develop innovation and technological capabilities: MapyMyIndia said it would develop the automation aspect of its map building platform through investments in artificial intelligence and machine learning, which they claim would enable it to create better content at a lower cost. “For example, we are working with ISRO to integrate our digital map twin with their huge catalogue of satellite imagery and earth observation data, which would then be available for use by app developers, businesses and government organisations,” it said.

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Pursue selective strategic acquisitions: The company in the DRHP said that it will continue pursuing acquisitions and investment targets to enter into new business segments and geographies in order to gain new customers, diversify revenue streams, and obtain employees. “We have also started to build and release digital maps for countries outside India, such as Sri Lanka, Bangladesh, Nepal, Bhutan, Myanmar, UAE and Egypt,” it said.

Effect of Covid-19 and a few other risks

Performance of automotive sector: MapMyIndia said that a part of its business is dependent on the automotive sector and that any adverse changes in the conditions affecting the sector can adversely impact its business, results of operations, and financial condition. “Sale of passenger vehicles faced sharp fall in 2020 due to COVID-19 and the Indian passenger vehicle market was already going through a difficult phase in Fiscal 2021 as sales declined by 7.9% as compared to Fiscal 2020.,” it said.

Cyber security and performance issues during CoWin integration: As a technology-based platform, MapMyIndia said it generates large quantities of location data, behavioural, and demographic data. “We face risks inherent in handling and protecting large volumes of data, including protecting the data hosted in our system, detecting and prohibiting unauthorized data share and transfer, preventing attacks on our system by outside parties or fraudulent behaviour or improper use by our employees, and maintaining and updating our database,” it said.

Apart from that, the company said that there may be performance issues in their operational and service phases.

We have experienced downtime and performance issues in the past due to dependencies on our infrastructure providers, or due to technical system glitches. For instance, when the cowin.gov.in portal went live on March 1, 2021 and there was a sudden surge of online traffic to their portal that has our map APIs embedded, we experienced a few hours of slow performance, after which our systems stabilized to match the surge in demand — MapMyIndia DRHP

Impact of Covid-19 on the business in the future not known: The company said that the spread of Covid-19 has forced it to modify its business practices (including employee travel, employee work locations, and cancellation of physical participation in meetings, events and conferences), and added that it may take further actions based on the situation in the future. “The extent to which COVID-19 impacts our future results will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions taken globally to contain the coronavirus or treat its impact, among others. Existing insurance coverage may not provide protection for all costs that may arise from all such possible events,” it said.

Ongoing case between MapMyIndia and Indian government: MapMyIndia said that there is pending litigation at the Delhi High Court between the company and the Indian government (Ministry of Defence, Survey of India, Ministry of Defence (Army), Commissioner of Police, New Delhi). A petition was filed by MapMyIndia requesting the Delhi High Court to pass an order quashing directions issued by the Indian government on several occasions in 2018, 2019, and 2020 “to take down our MapMyIndia’s website and seize the server hosting such website and Company’s data”.

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While subsequently the Department of Science and Technology (DST) Guidelines were issued in February 2021 in supersession of anything else on the subject issued by the GoI or its relevant departments and ministries, allowing Indian entities to among others, generate, distribute, publish, and/or create geospatial data, including maps (subject to regulations on attributes in the negative lists as stated in the DST Guidelines), without the requirement of obtaining any approvals from the GoI or any other department of the GoI, the Directions have not been quashed by the Delhi High Court and our Petition remains pending before the Delhi High Court as on the date of this Draft Red Herring Prospectus — MapMyIndia DRHP

Policies that may work in favour of MapMyIndia

  • Liberalisation of Geospatial Sector: In August 2021, the Ministry of Science and Technology announced the deregulation of the Geospatial sector in India. Under the old Geospatial policy, MapMyIndia in the DRHP said, there were stringent regulations on mapping and collection, use, storage, etc of geospatial data. “With dominance of the Government in this sector, it was difficult for private companies to get permissions from different departments to map and collect geospatial data,” it said.
  • Digital India Land Records Modernisation Programme: This programme which attempts to digitise the existing land records and develop an Integrated Land Information Management System (“ILIMS”) across the country, has been extended up to 2020-21.
  • Beyond the visual line of sight approvals for drone operations: MapMyIndia indicated that the country’s recent approvals in regards to conducting BVLOS operations would help the company. Drones are increasingly being used for land survey operations.
  • Drone Rules, 2021: The Drone Rules, 2021 which recently came into force have further simplified drone regulations. MapMyIndia said, “Certain safety features include geo-fencing capability and real-time tracking beacon will be mandated soon and will provide an impetus to the geospatial market in India.”

Read: Summary: Draft Drone Rules 2021 abolishes several norms, focuses on industry promotion

Policies that may prove restrictive

Personal Data Protection Bill: The company said that the enactment of the draft PDP Bill in the future may bring in additional compliance requirements for the company. “Further, the combination of heightened security concerns relating to the breadth and accuracy of the map databases could result in more restrictive regulations being applied to map databases,” it said.

Non-Personal Data Bill: MapMyIndia made a mention of the NPD Committee that was constituted by the Ministry of Electronics and Information Technology in 2019 to recommend a regulatory regime to govern non-personal data (“NPD”). The NPD Committee has released two reports till date, which recommend, among other items, a framework to govern NPD (defined as any data other than personal data), access and sharing of NPD with government and corporations alike, the DHRP said.

A look into the MapMyIndia’s competition

In the risk factors segment of the DRHP, MapMyIndia said that it competes with other companies with similar offerings on the basis of the quality of reputation, pricing, and relationship with customers. Here are a few screengrabs that will shed some light on this —


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Among other subjects, I cover the increasing usage of emerging technologies, especially for surveillance in India

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