Ofbusiness' Lending Arm Oxyzo Appoints JP Morgan To Raise $150 Million

(MENAFN- Live Mint)

Mumbai: Oxyzo Financial Services, the lending arm of B2B e-commerce startup OfBusiness, has appointed JP Morgan to raise up to $150 million in primary capital, two people familiar with the matter said.

The company will use the proceeds for its expansion plans, one of the people cited above said, adding that the deal was launched about three weeks ago. About 20% will be reserved for internal investors, while the remaining will be funded by new investors, said the second person, adding that the talks are in early stages and several large private equity funds have been sounded out.

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JP Morgan declined to comment on the development.“Early days of the fund raise, as Oxyzo prepares itself for a listing in 2.5-3 years. The round is likely all primary and some large PE investors are looking at it closely," Oxyzo's co-founder Asish Mohapatra told Mint in an emailed statement, confirming the plans.

The development comes over three years after the company raised $200 million in its series A round at a valuation of $1 billion. The funding was led by prominent investors including Tiger Global, Norwest Venture Partners, Matrix Partners and Creation Investments, making it one of the largest ever equity fundraisers in the first round by an Indian startup.

Co-founded by Ruchi Kalra in 2017, the Gurgaon-based company began by providing secured and unsecured purchase finance loans to small and medium enterprises (SMEs) for financing the purchase of raw materials. It is now in the business of providing secured and unsecured long-term financing to SMEs and corporates as well. Earlier this year, Oxyzo also raised a ₹533 crore debt round led by Neo Group, according to an Inc42 report.

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Oxyzo operates as a branch-based hub and spoke model with presence in over 70 industrial clusters across more than 20 states. It competes with players such as InCred and MoneyView. Oxyzo's operating revenue rose to ₹1,207 crore in FY25, up from ₹903 crore in FY24, according to an Entrackr report. The company's profit was up 16.5% at ₹340 crore.

Formally known as OFB Tech Pvt, OfBusiness supplies bulk raw materials such as steel , diesel, food grains and industrial chemicals to small and medium-sized businesses. Both Ofbusiness and Oxyzo run their businesses profitably and are run separately with different offices and teams although they target the same industries.

Oxyzo primarily caters to the SME segment and has a well-diversified clientele with infrastructure-related borrowers forming 29%, followed by manufacturing at 28%, services at 27%, retail at 11% and the balance being distributors as of March 2024. The company's assets under management grew to ₹6,667 crore from ₹4,780 crore a year earlier.

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It has built strong systems and processes in place in terms of underwriting, which support the asset quality metrics and the company is well capitalized with support by capital infusion by the parent, investors, and internal accruals, Crisil said in a January report. OFB Tech will continue to support Oxyzo with a committed capital of about ₹350-500 crore whenever needed, the credit rating agency added.

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