IndiaMART Acquires 26% Stake In IB Monotaro; To Focus Beyond Made-To-Order B2B Ecommerce

B2B marketplace IndiaMART has acquired a 26% stake in Japan-based IB Monotaro, buying the 810K shares from Emtex Engineering for a total consideration of INR 104.2 Cr. The venture aims to serve B2B businesses by offering an end-to-end commerce experience enablement.

Pursuant to this transaction, Monotaro (the parent company of IB Monotaro) will hold a 51.6% stake, IndiaMART’s parent company will hold a 26% stake and Emtex Engineering which represents the promoter group and early investors will hold a 22.4% stake in IB Monotaro.

After the announcement, shares of IndiaMART InterMESH (the parent company) rose by 2.24% hitting an intraday high of INR 4,930 on NSE.

IB Monotaro under its brand name ‘Industry Buying’ is engaged in the e-commerce business for industrial and business supplies in India. According to IndiaMART founder and CEO Dinesh Agarwal, the venture will enable IndiaMART to expand category experience of Monotaro combined with IndiaMART’s leverage over buyers and suppliers in the domestic market.

In a press briefing, he mentioned that while IndiaMART is a horizontal marketplace and caters to 50 industries with 97,000 different product and service categories such as raw materials, made to order and customised goods, it is mainly a discovery-to-negotiation-to-conversational commerce platform.It is a large discovery to conversational commerce platform with links to payment facilitation and business enablement.

“However, IB Monotaro is specifically going to focus upon MRO products (maintenance, repair, and operating supplies), industrial goods and consumables and that too, on a pure online order and immediate shipping basis,” Aggarwal answered to the query raised by Inc42.

On IndiaMART, an industry buyer can connect with manufacturers for custom needs, raw material, perform negotiations, have a conversation platform, a CRM platform; whereas IB Monotaro will be a B2B ecommerce platform.

IndiaMART’s Growth Trajectory

Started 25 years ago by Dinesh Agarwal and Brijesh Agarwal, IndiaMART has a market cap of INR 15,100 Cr on the stock exchanges. It recorded INR 2,523 Cr under cash and investment in Q3 of FY22, a 121% year-on-year rise from INR 1,143 Cr in Q3 of FY21. 

In Q2 of FY22, it posted INR 2,466 Cr under cash and investment. The company posted a profit after tax worth INR 70 Cr in Q3 of FY22, a 12% drop from INR 80 Cr it clocked in Q3 of FY21 and a 14% drop from INR 82 Cr it posted in Q2 of FY22. 

The company competes against new age tech companies including Meesho, IPO-bound Udaan, DealShare, among others and with the addition of IB Monotaro, it now also locks horns with US-based Amazon and Walmart-backed Flipkart. 

Apart from IB Monotaro, IndiaMART’s recent deals include 100% acquisition of accounting software Busy Infotech for INR 500 Cr; pumping INR 217.5 Cr in SMB focussed billing platform Vyapar; investing INR 13.35 Cr EasyEcom for 26.01% stake; investing INR 32.4 Cr to acquire a stake in Mynd Solution for its TReDs platform M1xchange, among others.

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