ValuePickr Forum

Indiamart Intermesh - Indian Alibaba?

Company delivered Rs32crs PAT in 1Q20.

Extrapolating the same could imply 128crs PAT in FY20 implying 28.7x P/E at current market cap of Rs3445crs.

My own estimates suggest FY20 PAT could be higher at Rs170-190crs implying P/E of 18.1-20.3x at current market cap of Rs3445crs.

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IndiaMART leads Series A investment in Vyapar

BENGALURU : Business-to-business (B2B) marketplace IndiaMART has led a Series A funding round worth ₹36 crore into ‘Vyapar,’ a mobile-based billing and accounting software targeted at small businesses.

The Series A investment round also saw participation from existing investors including India Quotient and Axilor.

Vyapar is a Bengaluru based start-up co-founded in 2016 by Sumit Agarwal and Ruqiya Irum which offers a mobile-based app to small businesses to manage their daily billing and accounting operations.

With over 1 million downloads of its Android app, Vyapar also separately offers a desktop version for billing Goods and Services Tax (GST) invoices, managing stock inventory, and accounting.

“Over the last two decades IndiaMART has effectively overcome the problem of access to market and technology by building a digital marketplace for MSMEs. This investment in Vyapar, that is solving the complex billing and accounting needs of MSMEs in a simplified manner, is aligned with our long term vision to make doing business easy for millions of businesses by providing them tech-enabled easy and cost effective solutions," said Dinesh Agarwal, Managing Director, IndiaMART in a statement.

“At Vyapar, our vision is to digitize every business in India and simplify the business processes that help them grow. IndiaMART’s scale and expertise will help us achieve this goal faster in turn transforming the MSME landscape in India,” added Vyapar founder Sumit Agarwal.

Founded in 1999, IndiaMART is one of the leading players in the online B2B marketplace for sourcing business products and services, connecting buyers with suppliers. This is IndiaMart’s first investment into a startup after its initial public offering (IPO) which announced in June.

Vyapar is one of the many brands in the B2B space to attract investor attention in the last one year. Apart from software as a service (SaaS) products, robotics, logistics, and trucking have witnessed several notable deals. Mumbai-based Peelwroks, a SaaS startup focused on offline retailers, had raised $5 million in a Series B round led by Equanimity Ventures in May.

In April, mobile analytics and marketing startup CleverTap on had raised $26 million in a Series B funding round led by Sequoia India. In March, Bengaluru-based Fyle, which provides expense management software for enterprises, had raised $4.2 million in a Series A round led by Tiger Global.


Excellent information …looks like a cash machine.

Govt of India will soon be launching Bharatcraft, a marketplace platform for MSMEs

Will this impact Indiamart ?

Don’t think this govt. initiative will impact them much since maintaining and sustaining these is more important than just creating another white elephant. But my bigger concern is the competition from Amazon business. I got this mail from them.


"As an Amazon Business customer, you have access to:

  1. GST invoice for Input Tax Credit
  2. Business Pricing & Bulk Discounts
  3. Business Analytics
  4. Amazon’s A-to-z Guarantee
  5. 3-Day Returns for Damages
  6. Fast & Reliable shipping"

Disc: took Small position and the stock ran away.

If 170 cr PAT is really a possibility, why would they come for an IPO early?

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sometimes you have to IPO to provide an exit to the PE investor.

Company has a lot of positives:

  • Negative working capital
  • 740 cr cash on balance sheet
  • Dominant market share (60%+)
  • High revenue growth
  • Operating leverage
  • Proxy to play tech in India (SMBs are rapidly switching to internet . Lot of new companies are targeting this ecosystem)

On competition: Amazon is not in top 3 B2B players, as of now I don’t envision amazon selling machine parts, construction supplies, industrial machinery etc. Also, business has network effects - more buyers and sellers join higher is the likelihood they will come again and influence more set of buyers and sellers. Network effect would make it tough for anyone to replace Indiamart.

What needs to be seen is how they utilize cash on balance sheet and cash flows to build an ecosystem of tech products(like InfoEdge started with Naukri and added 99acres, Jeevansathi, Zomato, PolicyBazaar etc).

Edelweiss views:
Coverage on sector:

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Weak subscription fee based business model with no fees from transacted goods or advertising, both huge Drivers of Alibaba profits.

Their supplier acquisition strategy of creating storefronts without permission is weird to say the least.

Search engines can probably do a better job.

Far more stronger players are likely to take up this space. Promoters seem to be lala type guys.

Can you please explain what lala types means

Meanwhile another B2B startup keeps guzzling cash. Their previous setup i.e. Flipkart never made money. The key question is will it be any different?

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There is comprehensive report on the company by Edelweise Securities. It is available on the net, hence believe that it is a public document. Here is the link
Disclosure: Invested


Time and again institutions are accumulating scalable models after IPO and retailers exit en masse taking home tiny profits. New shareholding suggest retail holders declined by 75% and corp body nos. jumped 9x. Now it is reasonable consolidated with less than 4% retail holding.

Disc: Invested


Similar is the case with Affle India, where the retail share holding has fallen to less than 2.5 percent.

Solid PBT growth of 60% plus YOY. Change in tax rules has resulted in higher taxes which has lowered PAT.

See management interview


IRCTC and Affle similr examples where stock reaching new highs after weak hands have exited.

Besides Nippon life and HDFC MF any idea about instt names invested in IRCTC?

Don’t understand why is he so downbeat in his responses. Is he suggesting that slowdown is about to hit them as well? I was not impressed with the cash generation in this quarter. It is sensible to keep expectations low and deliver better.

I suspect he is trying to talkdown the high expectations and preparing ground for a more subdued next quarter.