MapMyIndia Parent Shares Jump 18% As Board Reverses Decision To Invest In Ex-CEO's Firm
MapMyIndia’s board has reversed its decision to invest Rs 35 crore in a proposed new company of former CEO Rohan Verma, the company clarified.
Shares of CE Info Systems Ltd., the parent of MapMyIndia, jumped over 18% in the final hour of trading on Monday as the company's board of directors confirmed that it would not invest in a new venture to be floated by its former chief executive officer Rohan Verma.
"MapMyIndia’s board has reversed its decision to make any equity or debt investment in a proposed new company. The board will continue to explore and evaluate various opportunities in respect to B2C, while re-calibrating its investments in B2C segment," it said.
CE Info Systems' shares were hammered by over 12% early last week after it announced that the company holds the option of investing Rs 35 crore through compulsory convertible debentures in the company being floated by Verma.
After the drubbing at the bourses, the company's Co-Founder and Chairman Rakesh Verma told NDTV Profit on Wednesday that it will not invest Rs 35 crore in the outgoing CEO's firm.
“MapMyIndia was also planning to invest Rs 35 crore of CCD money into that company. Having heard the street yesterday, Rohan Verma has decided not to take any money from MapMyIndia,” he had clarified.
The statement issued on Monday confirms the reversal of the investment decision. "The company and the board believes it is important to ensure that the company goes above and beyond to allay any apprehensions," Rakesh Verma and Rohan Verma said in a joint statement.
"We keep looking at future optionalities across the spectrum and proposals for value creation with careful consideration of all facts and contexts to arrive at decisions which are in the best long term interest of all shareholders and stakeholders," they added.
Notably, Rohan Verma had announced he would step down as the CEO and wholetime director of the company, on Nov. 29. He will, however, continue as a non-executive director of the company.
Shares of CE Info Systems soared as much as 18.4% to Rs 1,946.65 apiece on the National Stock Exchange. The scrip settled 16% higher at Rs 1,912, compared to a 0.24% decline in the benchmark Nifty 50.
Year-to-date, the MapMyIndia parent's stock has slipped by 1.7%. Over the past 12 months, it is down by 12.25%.
Among the six analysts tracking the company, four have a 'buy' rating on its stock, whereas two recommend a 'sell', according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 22.7%.
