OfBusiness Faces Profitability Questions Ahead of IPO

As OfBusiness prepares for its stock market debut, the B2B commerce company is managing a distinct financial split: its massive commerce division drives revenue, while its smaller lending arm generates the majority of its profits. The startup, which helps small and medium enterprises (SMEs) purchase raw materials and secure financing, has achieved profitability—a rarity among its Indian B2B peers.

A Tale of Two Business Models

OfBusiness operates primarily through commerce, spanning raw-material trading, manufacturing, and apparel, and a lending business led by its subsidiary, Oxyzo. In fiscal year 2026, the company reported consolidated operating revenue of ₹20,472 crore. Of that total, the commerce division accounted for 93%. However, the financial services arm, despite its smaller size relative to commerce, contributed over half of the company’s segment pre-tax profits.

Financial data shows the lending-led business generated ₹505 crore in profit before tax, outperforming the commerce division’s ₹422 crore. This divergence comes as the company saw consolidated operating revenue decline nearly 8% year-on-year, while net profit rose 21% to ₹724 crore. Unlike many B2B competitors, such as Udaan, Moglix, and Zetwerk, which have struggled with losses, both OfBusiness and Oxyzo have independently reached unicorn status.

Scaling SME Relationships

The company’s commerce operations function in three layers: raw-material trading, manufacturing, and finished goods. Trading provides scale, while manufacturing aims to improve margins. During fiscal year 2026, more than 12,000 SMEs and emerging corporates transacted on the OfCommerce platform, accessing a catalogue of 103 products. The company uses business-discovery platforms, such as BidAssist, to match companies with procurement opportunities.

Investors are now watching to see if OfBusiness can increase returns within its commerce division while leveraging its lending and technology operations to extract more value from each SME client. The company’s future performance hinges on its ability to integrate procurement, manufacturing, and financing services effectively.