Decoding The Commerce And Lending Engines Of IPO-Bound OfBusiness

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OfBusiness is heading for the stock market with a business that earns most of its revenue in one place and most of its profits in another The imbalance raises a larger question. Can OfBusiness improve the returns on its commerce business while using lending and technology to earn more from each SME relationship? The answer lies in how its procurement, manufacturing, customer-discovery and financing operations work together. Here’s how the business makes money, and where its economics are changing OfBusiness is heading for the stock market with a business that earns most of its revenue in one place and most of its profits in another. Commerce, which spans raw-material trading, manufacturing and apparel, brings in almost all its sales. Yet its lending business, led by Oxyzo, contributes more than half its segment profits despite being a fraction of commerce’s size. Ahead of the IPO, the question is whether commerce can earn more from its scale, or whether lending will keep carrying the profits. The startup began its journey by helping small and medium enterprises buy raw materials and access working capital. Over the past decade, it has gone from sourcing steel and chemicals for manufacturers to making some of those products itself, expanding into apparel and building a sizable lending business through Oxyzo. Along the way, it has achieved something relatively rare in India’s B2B commerce sector. Not only has OfBusiness built a ₹20,000 Cr-plus profitable business, but both the company and its lending arm Oxyzo have independently achieved unicorn status. That’s a notable contrast with B2B commerce peers such as Udaan, Moglix and Zetwerk, which have struggled with losses. Infra.Market is another exception, having reported ₹220 Cr in net profit on ₹18,472 Cr in revenue in FY25. But as the company prepares for its stock market debut, its FY26 financials reveal an interesting shift. Consolidated operating revenue declined nearly 8% year on year, even as net profit climbed 21% to ₹724 Cr. More importantly, the business responsible for almost all its revenue isn’t the one contributing the most to its profits. Commerce, which includes raw-material trading and manufacturing, generated 93% of OfBusiness’ ₹20,472 Cr consolidated operating revenue in FY26. Yet financial services, led by Oxyzo, accounted for more than half its segment pre-tax profits. The lending-led business generated ₹505 Cr in profit before tax, compared with ₹422 Cr from commerce. The imbalance raises a larger question. Can OfBusiness improve the returns on its commerce business while using lending and technology to earn more from each SME relationship? The answer lies in how its procurement, manufacturing, customer-discovery and financing operations work together. Here’s how the business makes money, and where its economics are changing. The Commerce Engine Is Changing OfBusiness’ commerce business runs on three layers: raw-material trading, manufacturing and finished goods. Trading brings scale, manufacturing helps improve margins, and finished goods open up new markets. The first layer is straightforward. OfBusiness aggregates demand from manufacturers, sources materials and manages pricing, quality and delivery. More than 12,000 SMEs and emerging corporates transacted on OfCommerce in FY26, across a catalogue of 103 products. Its business-discovery platforms help build the pipeline: BidAssist matches companies with government tenders. It had crossed 1.3 Mn subscribers by FY26 and reached 1.7 Mn in October 2026. Nexizo, launched in 2025, offers AI-led buyer discovery, market intelligence and raw-material price insights. These services give the group a way to reach SMEs before they need procurement or credit; neither platform’s standalone revenue is disclosed. But there’s a limitation to this model. Commodity trading is a high-volume, low-margin business, and fluctuations in prices can quickly affect revenue. This was evident in FY26. Metals, OfBusiness’ largest category, saw sales decline 20% to ₹10,434 Cr. Chemicals grew just 4% to ₹3,663 Cr, while food processing and other products fell 55% to ₹1,636 Cr. Part of the contraction was strategic. OfBusiness said it exited lower-return commerce categories and discontinued operations to prioritise margins and manufacturing integration. But the shareholder letter also cites lower mild-steel prices and delays in two mega projects. The disclosures do not isolate how much of the metal’s decline came from deliberate exits versus these headwinds. The second layer, manufacturing, is OfBusiness’ attempt to improve these economics. As cofounder Asish Mohapatra said in September 2026, “As these ecosystems deepen, we are building manufacturing capabilities selectively in categories where we see an opportunity to add value to the supply chain.” Instead of simply buying and reselling materials, it selectively manufactures products where greater control over production can improve quality, supply and margins. In metals, the FY26 annual report identifies six of 26 products manufactured in-house under brands including Noble, Bison and Sangam Steel, with more than 1.1 Mn tonnes of annual capacity. It also reports that structural-steel capacity expanded from 100,000 to 500,000 tonnes a year. Chemicals follow the same logic. The FY26 report identifies in-house manufacturing for eight of 26 chemical products, with annual capacity exceeding 80,000 tonnes, and an expansion in ethyl acetate capacity from 10,000 to 80,000 tonnes. The aim is to capture more value from selected products without abandoning the broader trading catalogue. The strategy is selective rather than a complete shift away from trading. In a September 2026 update, the company described manufacturing capabilities across more than 40 products and plans to expand into herbicides and pesticides. The economics are improving, even as sales contract. Commerce revenue fell 9.7% to ₹19,056 Cr in FY26, but its reported segment result excluding other income rose from ₹303 Cr to ₹527 Cr. In his shareholder letter, cofounder Asish Mohapatra separately reported commerce EBITDA of ₹769 Cr, up 37.9%. The two measures are not interchangeable, and neither reveals manufacturing’s standalone margin. What they do establish is that commerce earnings improved despite lower revenue. The question is whether this improvement can continue as the business invests in capacity, rather than relying on commodity-price recovery or portfolio exits. Apparel Is Emerging As Fastest-Growing Business If metals are OfBusiness’ biggest revenue generator, fashion is becoming its fastest-growing category. Fashion sales surged from ₹376 Cr in FY25 to ₹2,828 Cr in FY26, a more than sevenfold jump. Unlike its traditional raw-material business, OfBusiness’ apparel operations focus on supplying finished products to global brands. It works with smaller manufacturers, manages product development, quality approvals and production, and handles everything from order fulfilment to international deliveries. As of March 2026, OfBusiness had developed capabilities to serve over 70 brands, including Michael Kors, Uniqlo, Adidas, IKEA, GAP and Zara. Its apparel operations spanned 21 processing facilities, with annual in-house manufacturing capacity exceeding 40 Mn units. Acquisitions have played a major role in OfBusiness’ apparel expansion. It acquired footwear manufacturer Alpine Shoes in October 2024, followed by Bengaluru-based garment and home-textile exporter Indian Designs Exports in FY26, which became wholly owned in January 2026. The acquisitions have broadened the product range and manufacturing footprint, but the report does not separate acquired growth from organic growth. In an August 2026 statement, cofounder Vasant Sridhar said, “Apparel has demonstrated how our model scales when we combine manufacturing capability with deep customer relationships and global market access.” The statement describes the company’s strategic rationale, not a separately disclosed measure of apparel profitability. That matters when assessing whether the sevenfold increase can be sustained. For smaller apparel manufacturers, OfBusiness takes on global customer acquisition, certifications, quality approvals and delivery, allowing suppliers to concentrate on production. Unlike commodity resale, this model can capture value through product development, processing and fulfilment. Oxyzo: The Bigger Profit Contributor Oxyzo is the profit counterweight to commerce. In FY26, OfBusiness’ financial services segment, led by the NBFC, generated ₹1,415 Cr in revenue, up 23%, and ₹505 Cr in profit before tax, up 11%. That is nearly 55% of the group’s combined segment PBT from less than 7% of consolidated operating revenue. Oxyzo lends for working capital, raw-material purchases and business expansion. Its advantage is access to SMEs already engaging with OfBusiness’ commerce and business-discovery platforms. A company finding contracts through BidAssist or buyers through Nexizo may later need supplies and credit; that creates cross-selling potential, although the annual report does not quantify conversions or acquisition-cost savings. Its underwriting combines financial and external data with customer information and technology. In an October 2026 company commentary on account management, cofounder Mohapatra observed, “We got there because of sales, but we stayed there because of KAM.” That emphasis on maintaining customer relationships also matters to a model that seeks repeat procurement and financing business. For some purchase-financing loans, Oxyzo pays suppliers directly, offering greater visibility over how the funds are used. That is a structural link between the commerce transaction and the lending product, not simply a referral arrangement. At FY26-end, Oxyzo reported a ₹10,706 Cr loan book, more than 60,000 MSME and emerging corporate borrowers, a 0.74% gross NPA ratio and operating expenses at 2.4% of average assets. These metrics indicate scale and reported asset quality, but do not remove exposure to funding costs and credit losses. Its acquisition of fixed-income distribution platform Golden Pi broadens the financing proposition. OfBusiness held 74.43% of Oxyzo at FY26-end, so the subsidiary’s profits are not entirely attributable to parent shareholders. Management wants to lift Oxyzo’s return on equity from the early double digits to the mid-double digits and diversify funding beyond banks. The challenge is to grow the loan book without requiring disproportionate capital or weakening credit quality. What Lies Ahead For OfBusiness? For OfBusiness, the next phase will be judged less by how much it sells than by what it earns on the capital tied up in commerce and lending. Manufacturing can lift the value captured from each industrial order; BidAssist and Nexizo can help originate customer relationships; Oxyzo can finance their purchases. The opportunity is to make those activities reinforce one another rather than merely add to revenue. Mohapatra’s targets make the test measurable: lift commerce return on capital employed from the late single digits to the early double digits, and financing return on equity from the early to the mid-double digits. The group generated ₹1,256 Cr in operating cash flow, invested ₹881 Cr and reported ₹375 Cr of free cash flow in FY26, with an ambition to fund expansion without shareholder dilution. International sales are also rising. Consolidated revenue from outside India increased 62% to ₹2,058 Cr in FY26, about 10% of operating revenue. Separately, an August 2026 company update described exports exceeding ₹2,500 Cr. US tariffs pressured apparel exports during FY26, even as OfBusiness expanded men’s woven apparel and established a Bangladesh manufacturing footprint for outerwear. Mohapatra has identified European expansion and additional chemicals capacity and marketing presence as priorities for the start of FY28, while flagging West Asian chemical supply disruptions and rising Indian labour costs. Apparel remains much smaller than metals, but its next test is whether growth translates into durable returns. The unresolved question ahead of the IPO is whether better commerce margins, profitable exports and disciplined lending can sustain that cash generation as capacity and credit demand grow.