CE Infosystems shares snap 4-day winning streak, slump 6% as profit booking kicks in

Mapmyindia shares surged close to 23 percent in the past four days.

Shares of the owners of MapmyIndia--CE Info Systems tanked 6 percent on December 10 as investors rushed to take home partial profits after the recent bull run in the stock. With today's fall, the stock also snapped a four day winning streak wherein it clocked in close to 23 percent gains.

Despite the four-day rally in the stock, most of the gains were seen in the previous session, following the company's reversal of its decision to invest in the new consumer-facing business being established by CMD Rakesh Verma's son, CEO Rohan Verma. The board made this decision after receiving feedback from investors, which urged the company to forego plans of any equity or debt investment in the proposed new company.

At 11.31 am, shares of CE Infosystems were trading at Rs 1,796.10 on the NSE. The sharp decline in the share price was also triggered by a spike in trading volumes in the counter. As much as eight lakh shares of the company changed hands on the exchanges so far, already higher than the one-month daily traded average of five lakh shares.

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Rohan Verma, the chief executive officer of MapmyIndia and son of founder chairman, Rakesh Verma, is leaving the company to form a new entity focusing on consumer business (B2C) in digital maps, geospatial products and platforms.

MapmyIndia proposed to fund the new venture, and on November 29, approved an investment of Rs 10 lakh for a 10 percent stake and an additional Rs 35 crore in Compulsorily Convertible Debentures (CCDs) in a new company being set up by Rohan Verma. This decision sparked backlash from minority shareholders, as it raised concerns about its impact on the parent company's prospects in the high-growth B2C sector, leading to a sharp decline in the share price below the listing price. In response, the management clarified that the new venture would be funded by Rohan Verma's own funds.

The decision to hive off certain consumer-facing mapping and navigation businesses, which offered high-growth potential, has also unsettled some minority investors and analysts, also adding to the sharp decline today.

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