Ofbusiness catches unusual tailwind in new IPO chase
on the IPO.
Indian regulators require companies to build a suite of independent directors, ensure governance compliance, and consolidate financial control processes before filing for an IPO. Ofbusiness has met most of these parameters and should be in a position to begin work on its DRHP in 3 months, Mohapatra said.
In FY23, Ofbusiness more than doubled its operating revenue to ₹15,342.57 crore, while increasing its profit by about the same measure to ₹462.76 crore.
In FY24, profit has jumped to ₹700 crore on a 38% surge in revenue, Mohapatra said. Ofbusiness is yet to officially report its FY24 financials.
Ofbusiness’ benchmarks to list publicly are in sharp contrast to what many startups have been doing in recent years.
While some startups with a clear path to profitability went public during the pandemic even as they were loss-making, others sought to become profitable and assess the sustainability of those profits for 4-6 quarters before going for an IPO.
Other companies in the B2B segment, too, have seen steep growth rates in recent years. Zetwerk, Infra.Market and others have been profitable and are attracting investor interest.
Ofbusiness has raised nearly $900 million across 11 funding rounds, according to the earlier Mint report. The company, which was valued at about $5 billion in 2021, counts Norwest Venture Partners, Matrix Partners, Alpha Wave Global, Tiger Global, and Softbank Vision Fund 2 among its investors.
A string of strategic acquisitions
Over the years, Ofbusiness has spent ₹1,300 cr on 10 acquisitions in sectors such as steel, garments and agriculture
Over the years, Ofbusiness has spent about ₹1,300 crore on 10 acquisitions in sectors such as steel, garments and agriculture. Some of its recent acquisitions include steel manufacturer SMW Ispat and Koeleman India Pvt. Ltd, which marked its entry into the food processing sector.
The company plans three more acquisitions this year, Mohapatra said, adding that Ofbusiness will spend another ₹200-300 crore towards these purchases, which will largely be in the garments space. Steel is another important area for acquisition as the sector accounts for about 32% of Ofbusiness’s revenue. While many of these acquisitions were executed at a conservative scale, “we want to acquire either buyers or suppliers for vertical integration and for market entry into a sector which is very adjacent to what we do today… this gives more value for our customer base,” Mohapatra said.
Acquiring companies with specific specializations or startups with a similar problem statement but which are yet to attain scale will allow Ofbusiness to go deeper into existing markets, according to Mohapatra.