B2B Marketplace OfBusiness’ Parent Gets CCI Nod To Acquire Steel Maker SMW Ispat

The Competition Commission of India (CCI) has approved the proposal of OFB Tech, the parent company of B2B marketplace OfBusiness, to acquire a 100% stake in steel manufacturer SMW Ispat.

It applied for approval with the CCI in March.

SMW Ispat has a manufacturing plant in Wardha, Maharashtra, and makes steel products such as TMT bars under the brand name Sangam TMT. 

OfBusiness, founded in 2016 by Asish Mohapatra, Bhuvan Gupta, and Ruchi Kalra, provides raw materials such as steel and non-ferrous metals via its online marketplace and offline channels. 

OFB Tech also provides credit facilities to SMEs that are looking to invest in infrastructure projects or in raw materials in general via its subsidiary Oxyzo.

Both OfBusiness and Oxyzo are unicorns. While OfBusiness turned unicorn in July 2021 after raising $160 Mn, Oxyzo joined the unicorn club in March 2022 after raising $200 Mn in India’s largest Series A round.

Reasons For The Acquisition

The acquisition makes sense from a vertical integration point of view. With this acquisition, OfBusiness has positioned itself to control the supply chain in steel.

SMW Ispat has a 40-Mn-tonne induction furnace for making iron and steel products, along with a beneficiation plant that produces iron ore with a capacity of 2,000 tonnes per day. 

With this acquisition, OfBusiness will have a strong manufacturing facility under its umbrella to ramp up steel sales on its platform.

OfBusiness On The Rise

Recently, speaking at The Makers’ Summit 2022, OfBusiness cofounder Vasant Sridhar said that its businesses had grown 3x over the last year.

OfBusiness last raised $325 Mn at a $5 Bn valuation from marquee investors such as Softbank, Tiger Global and Alpha Wave.

The B2B marketplace reported a 50% year-on-year (YoY) rise in its net profit at INR 19.76 Cr during FY21. Its operating revenue grew 97% to INR 1,379.01 Cr during the year. 

OfBusiness competes with Infra.Market, specifically in its raw materials business, as both the unicorns supply materials used for construction and infrastructure projects.

Correction Note | May 20, 2022, 06:00 PM

In the previous version of the article, we had wrongly said that Asish Mohapatra was a speaker at the TMS 2022. Changes have been made to reflect the correct information.

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