Decoding The Commerce And Lending Engines Of IPO-Bound OfBusiness

OfBusiness, an Indian B2B commerce startup, is preparing to go public with a business that generates the majority of its revenue from one division and most of its profits from another. Commerce, which involves raw-material trading, manufacturing, and apparel, brings in nearly all of the company's sales, while its lending business, led by Oxyzo, contributes over half of the segment's profits despite being a fraction of the commerce division's size.

The startup began by helping small and medium enterprises (SMEs) procure raw materials and access working capital. Over the past decade, it has expanded its offerings, moving from sourcing steel and chemicals for manufacturers to producing some of those products itself and entering the apparel industry. In the process, it has achieved unicorn status for both the company and its lending arm, Oxyzo, a rare feat in India's B2B commerce sector.

Despite this success, the company is facing a conundrum as it prepares for its IPO. While commerce generates the majority of revenue, the lending business led by Oxyzo is responsible for more than half of the segment's pre-tax profits. This raises the question of whether the company can improve returns on its commerce business or continue relying on lending to drive profits.

To understand how OfBusiness makes money and where its economics are changing, it's essential to examine the three layers of its commerce engine: raw-material trading, manufacturing, and finished goods. The raw-material trading layer involves aggregating demand from manufacturers, sourcing materials, and managing pricing, quality, and delivery.

This layer brings scale but is a high-volume, low-margin business. For instance, metals, OfBusiness' largest category, saw sales decline 20% in FY26, while chemicals grew by just 4%.

The manufacturing layer is where OfBusiness attempts to improve its economics. By selectively manufacturing products where it can add value to the supply chain, the company aims to capture more value from selected products without abandoning its broader trading catalogue. In FY26, the company reported manufacturing capacity for over 40 products, with plans to expand into herbicides and pesticides.

The finished goods layer, which includes apparel, is another area of growth for OfBusiness. Its BidAssist platform helps manufacturers match with government tenders, while Nexizo offers AI-led buyer discovery, market intelligence, and raw-material price insights. These services help the group reach SMEs before they need procurement or credit.

As OfBusiness navigates its IPO journey, the company must find a balance between improving returns on its commerce business and leveraging its lending capabilities to drive overall profitability. The success of this balance will be determined by how well the procurement, manufacturing, customer-discovery, and financing operations work together.