Fintech unicorn Oxyzo's net profit up 26% in April-December

“ICRA expects Oxyzo to grow the loan book at 15-20 percent over the medium term. In this context, ICRA believes sharp growth can pose challenges in maintaining the underwriting quality and consequently the asset quality indicators,” the note said.

Compared to other fintech NBFCs, the company is in relatively stable due to a high ratio of secured loan book portfolio, it said.

“The company’s ability to scale up its secured lending operations profitably, while maintaining healthy asset quality, on a sustained basis would be a credit positive. ICRA draws comfort from the fact that a significant proportion of the portfolio is secured, with the company reporting good asset quality since the commencement of operations,” the note said.

Most of Oxyzo’s loans have a relatively short tenure and a single customer revolves a particular limit multiple times, leading to better seasoning in terms of the cyclicity of the loan book, the note added.

Started in 2017, Oxyzo provides secured and unsecured purchase loans to small and medium enterprises (SMEs) for financing the purchase of raw materials that are used in their core business.

The Gurugram-based unicorn is backed by business-to-business commerce aggregator OfBusiness, which has a 70 percent stake in the startup.

While many fintechs suffer from poor underwriting, ICRA said Oxyzo’s framework is good, as indicated by a low net non-performing asset ratio of around 0.5 percent.

Oxyzo reported consolidated operating revenue of Rs 903 crore in FY24, a growth of around 58 percent from the previous year on rise in B2B loan disbursals. Net profit was up 47 percent at around Rs 290 crore.

Oxyzo was started in 2016 by Asish Mohapatra, Bhuvan Gupta, Ruchi Kalra and Vasant Sridhar as the lending platform of OfBusiness, providing cash flow and matched working capital financing for buying new materials for SMEs in sectors such as manufacturing and sub-contracting.

In 2022, Oxyzo raised $200 million in its Series A raise from Alpha Wave, Tiger Global, Norwest Venture Partners, Matrix Partners, and Creation Investments and became a unicorn, accompany valued at $ 1 billion or more.