How MapmyIndia founders doubled their stake before the IPO

MapmyIndia founder Rakesh Kumar Verma has many reasons to be in a buoyant mood. The shares of the digital mapping company, which he and his wife established 25 years ago, debuted on the public markets on December 21 last year, closing at a premium of over 33%.

This represents tremendous value for the family, which nearly doubled its stake, from 32% to over 61%, in the lead-up to the IPO. His wife, Rashmi Verma, sold shares worth Rs 439 crore ($59 million) in the IPO, but they still collectively hold 52%. The entire Rs 1,040-crore ($140 million) issue was an offer for sale as the company is profitable and just raised $30 million of primary venture capital to develop the business further.

The stock traded at Rs 1,762 on Tuesday, 70% higher than the issue price. This gives the company a market capitalisation of Rs 9,376 crore ($1.25 billion) and makes the family’s holdings worth over Rs 4,700 crore ($630 million). 

The CapTable sifted through MapmyIndia’s draft prospectus, or DRHP, and spoke to people involved in the transaction to understand how the promoters bumped up their stake and landed these staggering numbers.