IPO Note - C.E. Info Systems Limited By Choice Broking
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Salient features of the IPO:
* C.E. Info Systems Limited (CEIS), also known as ‘Map my India’ is a India’s leading provider of advanced digital maps, geospatial software and location-based IoT technologies.
* The company provides products, platforms, APIs and solutions across a range of digital map data, software and IoT under the MapmyIndia and Mappls brands to a number of customers ranging from marquee and renowned global tech giants, new-age consumer IT companies to BFSI and key government organisations.
* The issue is pure offer for sale (OFS).
* CEIS reported operating revenue of Rs153 cr and PAT of Rs60 cr in FY21.
competitive strengths:
* B2B and B2B2C market leader in India with a comprehensive suite of SaaS, PaaS and MaaS offering capitalizing on early mover advantage
* Independent, global geospatial products and platforms company with strong data governance
* Market position built around proprietary technology and network effect resulting in strong entry barriers
* Marquee customers across sectors with strong relationships and capability to up-sell and cross-sell
* Profitable business model with consistent financial track record, high operating leverage and strong cash flows.
Valuation: At the higher price band of Rs1,033, the issue is available at P/E of 58.2x on FY22 annualized EPS.
Below are few key observations of the issue:
* India’s addressable market of digital maps and location based intelligence services is expected to grow to $7.7 bn in 2025 at around CAGR of 15.5% during 2019-2025. GoI likely announcements of new projects & policies are among the key drivers that encourages domestic players of digital maps and associated solutions. Global addressable market of digital maps and locations is expected to grow at a CAGR of 13% to $173.6 bn by 2025. Mobile navigation devices, wide usages of 3D platforms and advances survey technology, digital mapping are the key growth drivers for growth in total addressable market.
* In 2021, GoI announced deregulation of the geospatial sector in India which opened the space of new growth opportunities for private firms like CEIS as the new guidelines in India allow all Indian entities to freely acquire, collect, generate, prepare, analyse, store or distribute geospatial data. While the govt opens out huge scope for geospatial sector in India, it restricts foreign companies from doing granular level mapping with certain conditions which make difficult for overseas players to build accurate HD maps. All these initiatives to positively impact home grown company C E Info System (CEIS) which even does not have any competition from domestic player operating in the same business.
* CEIS, incorporated in 1995, 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).
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