Health is Wealth

We are now onto the 5th year of our B2B commerce business. While we are more
popular for SME lending, our B2B commerce business has steadily grown to ~$0.5B
annual revenue. As B2B markets are very deep, our 5-pronged method is built on
the theme “Health is Wealth”.

1. Transaction level “real” profitability: Each transaction has to be profitable
net of all loaded costs (including credit costs) rather than in a portfolio like
a particular product category or specific geography.

2. Operations muscle: We believe in being more relevant to a supplier in his
revenue than having a very large supplier base. Other capabilities include
buying from source and deep technical, market know-how.

3. Diversified presence: We are in 7 raw material chains (Steel, Non-Ferrous,
Plastics, Petrochemicals, Textiles, Chemicals and Agri). It inherently hedges us
from trouble in a few.

4. Risk mindset: All large B2B chains have credit embedded. Whilst building a
NBFC in parallel, underwriting/collections came relatively easy to us.

5. Capital Efficiency: Pumping equity for working capital (in inventory and
receivables) in B2B chains can increase margins disproportionately. However, our
benchmark is to build with less than 30 days’ capital, and that too financed by

Posted by Asish Mohapatra on LinkedIn