Exclusive: OfBusiness to pick up stake in Bengaluru-based apparel exporter Indian Designs in fifth deal ahead of IPO

Representative image

IPO-bound OfBusiness is in advanced talks to acquire stake in Indian Designs Exports Pvt. Ltd, a Bengaluru-based apparel and home furnishing exporter and manufacture with clients like Zara, H&M, IKEA, marking its fifth such deal in four years as it accelerates shift toward a manufacturing-driven model.

The deal, which is still in process, according to people familiar with the matter, is expected to strengthen OfBusiness’ presence in apparel manufacturing space ahead of its planned $1 billion IPO. It may include share swap and cash component, sources tell.

While OfBusiness confirmed its investment into the apparel manufacturing space, it did not share details of the deal with Indian Designs Exports.

The latest deal comes just weeks after OfBusiness acquired Kerala-based Elixir Extracts, expanding its presence in the food ingredients sector. Previous acquisitions include Koeleman India (gherkin processing), Alpine Shoes (footwear), and SMW Ispat (steel).

It now primarily operates across four categories--metals, apparels, agri products and chemicals.

Founded in 2015, the Gurugram-based B2B raw material fulfilment platform OfBusiness has been diversifying beyond its original commodity aggregation business, which is susceptible to intense competition from both organised and unorganised players, by acquiring brands and manufacturers to build private labels and integrated supply chains.

Besides, the trading business across its predominant segments like steel, metals, chemicals, construction material commodities is also exposed to the inherent cyclicality and volatility in prices.

“They have been in raw material trading for the longest, which is margin-constrained, especially in volatile categories like metals and chemicals. All these manufacturing deals are will give them margin stability and value addition,” said a person familiar with the matter.

The strategy is not restricted to Ofbusiness. Its peers like Infra.market, also planning to hit public market, are also pushing their manufacturing or private label play. They recently acquired wood panel –focused manufacturing units besides investments in firms like RDC Concrete, Shalimar Paints, and Emcer.

Also read: OfBusiness launches AI-powered discovery platform Nexizo for SMEs

A Rs 1,200-crore export play

Promoted by Naseer Humayun, Javeed Haroon, and Saad Salman, the three decade-old Indian Designs Exports (IDEPL) manufactures casual garments and home textiles across 12 production units in India and Bangladesh, employing over 15,000 people. In FY24, the company reported Rs 1,246 crore in revenue with an EBITDA margin of 9.85 percent, according to a March 2025 CARE Ratings note.

Exports made up 94 percent of its topline, with a client roster primarily across European and American regions, including H&M, Zara, IKEA, Old Navy, Target, Aritzia, American Eagle, Asos, and Primark, servicing over 25 international buyers across categories.

As of February 2025, IDEPL had an active order book of Rs 253 crore and reported standalone revenue of Rs 738 crore for the first nine months of FY25. Despite cost pressures such as elevated air freight, it maintained EBITDA margins above 6 percent, supported by repeat orders and renegotiated terms with anchor clients like IKEA. The company is likely to cross a revenue of Rs 1,000 crore in FY25, the rating agency notes.

Currently, apparel contributes about 10 percent to OfBusiness's overall revenue--which is likely to be boosted by the latest investment. As per its website, it already caters to global and domestic brands including Zara, Abercrombie & Fitch, Doen, Michael Kors, Uniqlo, Adidas and Skechers--via its aggregator model.

Boosting manufacturing share, IPO prep

Recently, Ofbusiness announced its plans about investing Rs 3,000 crore to double its steel capacity to over 4 million tonnes per annum across its subsidiaries SMW Ispat, Noble Tech Industries, and Shree Sidhbali Ispat. The expansion is expected to increase sectoral EBITDA by 2.5x, co-founder and CEO Asish Mohapatra said earlier this year.

Commerce revenue (excluding lending arm Oxyzo) stood at an estimated Rs 20,000 crore in FY25, with operating profit margins at 2.5 percent. With more integrated manufacturing in the mix, analysts expect gradual improvement in margins. Liquidity remains strong, with Rs 1,641 crore in cash and liquid investments and additional Rs 500 crore in undrawn bank lines.

Backed by investors like SoftBank Group, Tiger Global, Z47, Zodius Capital, Creation Capital, Falcon Edge, and Norwest Venture Partners, OfBusiness has raised Rs 5,370 crore in equity to date.

The company has publicly stated its intent to launch a $1 billion IPO in FY26 to support expansion across its industrial and consumer verticals. Part of this capital is expected to go into its Rs 3,000 crore capex plan to double steel capacity. The firm has already converted into a public entity in January this year--a critical step before IPO--and raised Rs 100 crore debt from Cornerstone Ventures.