Indiamart announces a spate of investments. Their long term potential is difficult to comment upon.

Indiamart has recently announced a series of acquisitions/ investments.

1. Rs 500 crore for 100% buyout of Busy Infotech Private Limited

  • Consideration is entirely paid in cash.
  • The company provides ‘BUSY Accounting Software’ – a web based business accounting solution for the companies. The solution also offers GST billing & return filing, TDS/TCS, configurable GST compliant invoicing and inventory management.
  • Busy incorporated in 1997, reported revenues of Rs 42.4 Crores and a profit after tax of Rs 11 Crores in FY 21.
  • It claims to have a subscriber base of 2 lakh+ companies.
  • Rationale of acquisition is to offer Busy solution to Indiamart’s customers.

2. Rs 61.55 crore in the ongoing funding round of Simply Vyapar Apps Private Limited

  • Simply Vyapar is engaged in business of providing business accounting software with Billing, GST Invoice, Stock Inventory & Accounting solutions.
  • Indiamart already owns 26% of Simply Vyapar. It had invested Rs 31.2 crore in September 2019 valuing the Company at Rs 120 crore then.
  • Current investment will only marginally increase Indiamart’s stake in the Company to 27%, implying that the current investment is only to manage the dilution that would have otherwise happened to Indiamart’s existing 26% stake. This implies a current valuation of about Rs 350 crore i.e., almost 3x in about 2 years 4 months.
  • Vyapar’s operational metrics though have significantly improved (albeit at low base) during this period – paid users increased from 15k to 100k+, monthly revenue run rate from Rs 20 lacs to Rs 1 crore+. Reported revenues increased from Rs 1.5 crore in FY 19 to Rs 11.7 in FY 21.
  • Busy and Vyapar seem have an overlapping business.

3. Rs 7.5 crore in Legistify Services Private Limited

  • Legistify offers a SaaS tool (Legistrak) which allows businesses to manage their legal workflows – litigation tracking, notices management, legal vendor management, etc.
  • Indiamart already owns 11.3% of Legistify.
  • Stake in lieu of the current investment will be known in future as the investment is through convertible instruments and conversion is dependent on future events.
  • The Company reported Rs 1.73 crore of revenues in FY 20.

Indiamart has always conveyed it’s intentions to grow through both organic and inorganic route.

It’s other investments include – Tolexo (Poorna, 100% holding), Easy Ecom (26%), M1xchange (7.7%), Tentimes (30%), Mobisy (16%), Shipway (26%), Truckhall (25%) and Agillos (26%).

Which of these investments would do well or not for Indiamart is anybody’s guess.

As an analyst/ investor, it’s exceedingly difficult to keep a track of so many moving parts. Besides, in most of these investments, Indiamart’s stake is less than 50%. It’s therefore unlikely that we will get a clear picture on their performance anytime soon.

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