IPOing OfBusiness, a B2B commerce platform, is expanding its manufacturing and processing capabilities for approximately 10 products spanning the metals, chemicals and apparel industries. It aims to leverage value-added opportunities that enhance profitability and moat beyond buying and selling over 100 products. Today, OfBusiness has integrated manufacturing capabilities into more than 40 products, and this expansion of production has occurred in select product categories that the platform has been delivering for years.
In the chemicals sector, which accounts for about 18 per cent of OfBusiness’ commercial business worth Rs 19,174 crore, the company operates its own ethyl acetate unit in Maharashtra and plans to start manufacturing herbicides and pesticides.
In apparel, the fastest growing of OfBusiness’s four verticals, the company has integrated procurement with in-house manufacturing capabilities. This is due to the increase in production capacity for clothing, accessories and footwear. It is concentrated in Delhi-NCR, Andhra Pradesh, Tamil Nadu, Karnataka and Bangladesh. This helped increase the company’s employee count to 35,000.
For a commercial platform, in-house manufacturing capabilities strengthen the platform through more direct control over production, quality and delivery. It also strengthens the profitability profile typically associated with a pure sourcing model.
“The common thread is SMEs: on the one hand, it helps businesses procure more efficiently, and on the other, it gives manufacturers and suppliers access to demand,” said Asish Mohapatra, co-founder of OfBusiness. “As these ecosystems deepen, we are selectively building manufacturing capabilities in categories where we see an opportunity to add value to the supply chain.”
Metals remains OfBusiness’s largest vertical by revenue, covering construction steel, flat products, structural steel, aluminium, zinc and copper, with construction steel alone accounting for about a fifth of total revenue.
The company says its next phase of growth will focus less on adding new verticals and more on deepening capabilities in sourcing, manufacturing and market access in the ecosystems in which it already operates. This includes further investment in chemicals production and new export regions such as the EU and UK.