Indiamart Intermesh Ltd has entered into an agreement to buy 100% stake in accounting software company Busy Infotech Pvt Ltd for Rs 500 crore, the company said in a statement on Tuesday. In addition, Indiamart said that it will be increasing its stake in accounting and inventory workflow product SimplyVyapar Apps Pvt Ltd while also acquiring a stake in legal workflow app Legistify.
“Thousands of Indian businesses rely on Busy for their accounting needs, and their value proposition fits in well with Indiamart’s long-term objective of making doing-business easy for Indian businesses.This acquisition further augments Indiamart’s value proposition...”, said Dinesh Agarwal, Founder and Managing Director of Indiamart.
Busy clocked revenues of Rs 44 crore for 2020-21 (FY21) and a profit of Rs 11 crore, the firm said.
Indiamart further said that it participated in Simply Vyapar’s Rs 217.5 crore Series B funding round. The round was led by Westbridge Captial and also saw participation from existing investor India Quotient. Indiamart had previously led Simply Vyapar’s Series A investment round in September 2019, by investing Rs 31.2 Crores for a 26% stake in the company, it said. Simply Vyapar offers a GST billing, accounting and inventory management product for small businesses, which allows them to digitize their business operations. It claims to have over 1 lakh paying customers for its product.
Indiamart said it also will be making an investment in Legistify, a software-as-a-service (SaaS) tool, which enables businesses to manage their legal workflows, indirectly through its wholly-owned subsidiary Tradezeal. As a part of the transaction, Tradezeal has agreed to buy 75,000, 0.0001% Compulsorily Convertible Debentures (‘CCDs’) in Legistify.
Of late, Indiamart has been investing aggressively in startups. In 2021, the company via Tradezeal acquired 26% stake in Gurugram-based Shipway Technology for Rs 18.2 crore, and it also bought an additional 3.02% stake in Kolkata-based Truckhall. Earlier this month, Indiamart invested $2 million in EasyEcom, an e-commerce enabler platform, for a 26% stake.
Indiamart Intermesh’s recent acquisition announcements follow the company’s December quarter results, where it logged a net profit decline of 12% from a year earlier. The company reported a rise in its revenue from operations but its operating costs surged during the period, hitting its net and operating profits.
The company reported a consolidated net profit of Rs 70 crore for the quarter ended December, against a net profit of Rs 80 crore from a year earlier, the company’s regulatory filings with the stock exchanges showed.
The company’s revenue from operations jumped 8% during the period to Rs 188 crore taking the total income to Rs 210 crore, but operating costs surged 27% to Rs 109 crore. As a result, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) or operating profit also fell to Rs 79 crore for the December quarter from Rs 88 crore a year earlier.
During the period, Indiamart’s manpower and outsourced sales costs jumped 29% from a year earlier to Rs 82 crore, while its finance costs, financial liabilities, and losses from its subsidiaries, grew 24% to Rs 27 crore.
On a standalone basis, the company reported total income of Rs 209 crore, clocking a 6% growth from a year earlier, and a net profit of Rs 74 crore, which declined 9% from the corresponding quarter of last financial year.
Indiamart said that it is witnessing a 30% growth in traffic on its website and mobile application on a CAGR (compounded annual growth rate) basis over the last six financial years.
However, the company had 259 million visits in the December quarter, against 284 million in the September quarter and 253 million in the quarter ended December 2020. The company said about 81% of its traffic comes through mobile.
The company also said that number of registered buyers on its e-commerce platform rose 20% in the December quarter from a year earlier to 143 million and claimed that it is witnessing a 30% CAGR growth in registrations over the last five years.
Meanwhile, Indiamart’s annualised revenue per subscriber grew 3% from a year earlier to Rs 48,000. However, the number was slightly lower on a sequential basis, as it had reported annualised revenue per subscriber of Rs 48,400 in the September quarter.
