IndiaMART eyeing acquisitions, planning strategic investments

Coming on the back of successful fundraising (QIP) of over ₹ 1,000 crore, B2B e-commerce company, IndiaMART, is eyeing acquisitions and planning strategic investments as it looks to widen the scope of its “ecosystem” and go “beyond buyer-seller discovery and price matches”.

The company plans to strengthen additional services including “payment gateways” – like pay with IndiaMART, receivable management, GST invoicing, accounting services, and conversational commerce across subscribers, that primarily include the small and medium enterprises.

Over the last one year, they have analysed 100 plus different companies as a part of their expansion plan.

“Funds raised will be used towards strengthening our ecosystem by adding more services, like say a payment platform or receivables, order & inventory management, accounting software, and so on. We are open to picking up a minority stake or strategic investments or outright acquisitions in these companies,” Dinesh Agarwal, MD, and CEO, IndiaMART InterMESH Ltd, told BusinessLine.

Agarwal did not rule out the chances of acquisition of competing B2B e-commerce companies if they “help solve problems in a particular vertical that IndiaMART deals with”.

“With increasing competition, there will be verticals that newer B2B e-commerce companies will focus on, thus making them potential acquisition targets for us,” he added.

Increased Buyer Queries

IndiaMART, listed on the bourses, reported consolidated revenue from operations ₹ 174 crore for the quarter ending December 31, 2020, a 5 per cent year-on-year growth over the last year. The total number of paying subscription suppliers stands at approximately 1.48lakhs with there being a net addition (in Q3FY21) of around 7000.

Deferred revenue (subscriptions due and spread out over the next few quarters) stood at ₹ 633 crore. Subscriptions account for 95 per cent of the company’s turnover

A positive fall out of the pandemic has increased “buyer queries” on the site. Queries are up, 30-40 per cent. Against an average traffic (on the buyer site) of 60 million per month, post-Covid traffic numbers have increased to around 85 million, a month.

However, customers -- those listing on the site – continue to prefer short-term one-month subscriptions and memberships; over long-term plans of one-year or three-years. This made the company come-up with six-month packages.

Recoveries

According to Agarwal, IndiaMART saw a recovery “across the board”. Collections from the customers for the period reached ₹ 179 crore, a sequential growth of 9 per cent, quarter-over-quarter.

The December 2020 collections were better than December 2019, pre-COVID levels and business inquiries delivered increased by 37 per cent, YoY, to 154 million with “90 days repeat buyers standing at about approximately 60 per cent”.

“Now, we are back to March 2020 paying customer levels and growth should be positive going forward. Factors like offices opening up, face-to-face meetings resuming, medium-scale businesses regaining confidence, stronger performance of the manufacturing sector and steady economic recovery coupled with the slowing down of infections and speeding up of vaccinations would be important indicators in coming quarters,” Agarwal said.