Ahead of its stock market debut, OfBusiness underscores a marked shift in its revenue and profit structure. While its core commerce segment accounts for most revenue, the lending business led by Oxyzo delivers a majority of profits, raising questions about the company’s future growth drivers and strategy.
- Commerce drives 93% of revenue but less than half of profits
- Oxyzo lending contributes over 50% of segment pre-tax profits
- FY26 revenue declined 8%, net profit rose 21% to ₹724 Cr
What happened
OfBusiness is preparing for its initial public offering after reporting consolidated revenues of ₹20,472 Cr in FY26, a decrease of nearly 8% compared to the previous year. The company’s core commerce business, which includes raw-material trading, manufacturing, and apparel, accounted for 93% of this revenue. However, profitability came predominantly from the financial services segment, led by Oxyzo, which generated ₹505 Cr in profit before tax compared to ₹422 Cr from commerce.
This divergence highlights a significant shift in the company’s business model. While commerce drives most sales volumes, the lending arm has become the more profitable segment. This has led to speculation about the sustainability and future direction of OfBusiness as it leverages SME relationships through financing and technology.
Why it matters
OfBusiness stands out in India’s B2B commerce sector by building a profitable ₹20,000 Cr-plus business and achieving separate unicorn status for both the parent company and Oxyzo. This contrasts with other major players like Udaan and Moglix, which continue to face losses. The shift toward profits driven by lending rather than commerce reveals how diversified SME service companies can create new revenue streams beyond traditional trading.
The dual-engine approach—combining commodity sourcing with embedded financial services—could be a blueprint for future B2B platforms focused on deepening SME engagement. However, it also points to the challenges of trading businesses, which face margin pressures and market fluctuations, especially in commodities like steel and chemicals. How OfBusiness balances margin expansion in commerce with growth in lending will be critical in maintaining overall profitability.
What to watch next
Investors and market watchers will closely observe whether OfBusiness can improve earnings from its commerce operations through increased vertical integration in manufacturing and strategic exits from low-margin categories. Efforts to build technology-enabled discovery platforms like BidAssist and Nexizo highlight attempts to deepen SME engagement and pipeline growth without immediate revenue disclosure, potentially adding value over time.
The broader question remains whether the lending segment will continue to scale and dominate profit generation as it currently does. The outcome will depend on regulatory developments, credit risk management, and the company’s ability to leverage procurement, financing, and manufacturing synergies to drive sustainable long-term growth post-IPO.