Indiamart founder CEO Dinesh Agarwal celebrating a 25% jump in value at listing says Indian e-commerce is a ‘winner takes all’ market

Business Insider

Dinesh Agarwal, founder and CEO of IndiaMart 

When IndiaMart opened its doors for an Initial Public Offering, the founder Dinesh Agarwal was apprehensive – after all, it was the first IPO after the elections with the Narendra Modi government coming back to power – and that too a tech IPO! But in two days, investors subscribed for 36 times the. But in two days, investors subscribed for 36 times the total number of shares on offer. Today, the stock has listed 25% over its issue price. 

IndiaMART InterMESH which is the parent company for – one of the country’s biggest online marketplaces for businesses – is one of the country’s oldest e-commerce ventures that started in 1999. 

It competes with, Alibaba India and IndiaMart has over 82.7 million registered buyers and 5.55 million supplier storefronts across 54 industries in India at the end of March 2019. 

This compares to’s (founded in 1996) 4.96 million registered users today, ExportersIndia’s (founded in 1997) over 2.7 million users in India. Meanwhile, the global e-commerce giant Alibaba, which launched the India unit in 2008, has over 6 million members with 15,000 Indian SMEs on its platform. 

However, at IndiaMart competition isn’t a worry. “We are 16X the size of our next competition, our lead is only growing. It’s a winner takes it all kind of a market and is growing,” Dinesh Agarwal, founder and CEO of IndiaMart, told Business Insider. 

In an interview, Agarwal said the IPO process very overwhelming but he was sure of the prospects. “We were confident about our numbers, having built a robust business and having had great numbers since the last three years. Even while the small and medium enterprises had faced temporary setbacks like demonetization GST and then the elections, we have managed to put out our best performance,” said Agarwal. 

IndiaMart’s revenue has been growing at 29% per annum for three years. IndiaMart, which was founded in 1999, today claims to have a 60% market share of the online business classifieds space in India, and it focuses on providing a platform to Small & Medium Enterprises (SMEs), large enterprises as well as individuals. 

Will the success of Indiamart’s IPO open the doors for other too? “That’s a tall claim. I think it all depends on the readiness of the company rather than the market,” he said. 

With a listing on the stock market, IndiaMart is now open to market scrutiny. But Agarwal is rest assured. “Our business model has been proven time and again. We know how to steer through tough times and accept newer technologies. When we started we were a desktop based company, now we are a mobile B2B company, so we have seen how to evolve with time. We have seen 5 governments too through our time!,” he said. 

With the IPO proceeds in its kitty, IndiaMart plans to grow bigger. “Today we are attracting larger companies like Jindal Steel, JCB Machines, who are advertising and generating lead on our platform. We have also adapted SaaS – Software as a Service – where we have developed a CRM for SMEs to manage their leads, invoice management and more,” he said.

IndiaMART surges 21% on debut to log best listing gains in 2019 so far

Economic Times

The Rs 475-crore IPO, which was sold in the price band of Rs 970-973, was subscribed 36.21 times. 

NEW DELHI: IndiaMARTNSE 33.81 % InterMESH made a strong market debut on Thursday, as the scrip got listed at Rs 1,180 on BSE, a premium of 21.27 per cent over its issue price of Rs 973. This made the company the top mainboard listing so far this year. 

The scrip was trading at Rs 1,267, up 30.22 per cent, around 10.15 am. 

The Rs 475-crore IPO, which was sold in Rs 970-973 price band, was subscribed 36.21 times. 

The strong response to the issue was seen even as a few brokerages had an avoid rating on the issue. 

At the issue price, the stock demanded a valuation multiple of 139.68 times at FY19 EPS of Rs 6.97. The P/B ratio stood at 17.51 times at FY19 book value of Rs 55.57. 

Neogen Chemicals (41.07 times) and Polycab India (51.88 times) were some of the recent IPOs which received good investor response on the listing. The scrips debuted with 15-17  premiums.

In the case of IndiaMART, the issue received bids for 9,74,93,895 shares against the total size of 26,92,824. The qualified institutional buyers’ quota was subscribed 30.83 times, non-institutional investors 62.12 times and retail investors 13.37 times. 

The company is India’s largest online B2B marketplace for business products and services. Based on FY20E and FY21E EPS, the stock is valued at a P/E multiple of 35.1 times and 25.9 times, respectively, which is at a premium to the peer average of 21.5 times and 15.3 times, said Choice Broking. 

But considering the growth outlook coupled with dominant market position and expected benefit from the operating leverage, we feel that the future benefits outweigh the target share price derived from various traditional valuation multiples, the brokerage said in its IPO preview. 

“Such types of technological and scalable business models should not be valued merely on profitability, but also on future market potential and capabilities of the management to work towards achieving the potential,” it said. 

IndiaMART InterMESH makes strong debut; ends 34% higher against issue price

Business Standard

The stock rallied up to 38 per cent to Rs 1,339 in the intra-day trade on the BSE and 37.5 per cent to Rs 1,338 on the NSE.

Shares of IndiaMART InterMESH (IML) made a strong debut on the bourses, by ending at Rs 1,303, up 34 per cent against its issue price of Rs 973 apiece on the BSE. The stock opened at Rs 1,180, a 21 per cent higher against the issue price on the National Stock Exchange (NSE) and BSE.

Post listing, the stock rallied up to 38 per cent to Rs 1,339 on the BSE and 37.5 per cent to Rs 1,338 on the NSE. A combined 8.25 million shares changed hands on the BSE and NSE on first day of listing.

The initial public offering (IPO) of IML had received a strong response with bids for 97 million shares, the exchange data showed. The IPO was subscribed 36 times. The qualified institutional buyers (QIBs) category was subscribed 31 times. The non-institutional investor’s category was subscribed 62 times. The retail individual investors (RIIs) category was subscribed 14 times.

IML is India’s largest online Business-to-Business (B2B) marketplace for business products and services. IML enjoyed 60 per cent market share in online B2B classifieds space in India in FY2017, according to a KPMG report commissioned by the company.

IML primarily operates in the product and supplier discovery marketplace i.e. or “IndiaMART”. The Company has 129,589 paying subscription customers in its three different packages as on FY19. IML had 82.7 million registered buyers and 5.5 million supplier storefronts in India as on FY19.

According to KPMG, the wholesale market in India is estimated to reach US$700 billion in 2020, from US$300 billion in 2015. To tap into this potential, B2B e-commerce players have started building platforms for SMEs and traders.

“The number of SMEs buying and selling online has increased over the years with 27 per cent of the internet-enabled-SMEs being engaged in e-commerce in 2015, according to KPMG. IndiaMART targets the Indian B2B market with the objective of facilitating discovery of businesses through its online marketplace,” analysts at Reliance Securities said in an IPO preview note.

The objects of the issue was to get the benefits of listing the equity shares on the BSE and the NSE and to enhance its visibility and brand image and provide liquidity to its existing shareholders. The proceeds from the offer will be paid to selling shareholders and the company will not receive any such proceeds.

Indiamart Shares Make Strong Debut On Stock Markets


Indiamart shares saw good interest for its shares in the Initial Public Offering.

Indiamart InterMESH shares made a strong debut on stock markets today. Indiamart shares surged as much as 35.40 per cent to Rs. 1,317.70 on the National Stock Exchange from its issue price of Rs. 973. On the BSE, Indiamart shares surged 37.60 per cent to touch high of Rs.1339.00 from its issue price. During the pre-market discovery price, Indiamart shares opened for trading at Rs. 1,180 and from that level the stock climbed 13.44 to intraday high.

Indiamart share price surged over 35%. Here is all you need to know:

Indiamart shares saw good interest for its shares in the Initial Public Offering (IPO) from investors as the issue was subscribed more than 36 times on its final day of the issue.

Indiamart raised Rs. 476 crore from the IPO which was an offer for sale (OFS) by its promoters Dinesh Chandra Agarwal and Brijesh Agrawal along with Intel Capital (Mauritius), Amadeus IV DPF Limited and Accion Frontier Inclusion Mauritius.

IndiaMart sold equity shares of face value of Rs. 10 each in the price band of Rs. 970-973 per share between June 24 and 26.

The Delhi-based IndiaMart InterMESH is an online marketplace and business-to-business (B2B) classifieds platform.

The company enables the discovery of products across 50 industry categories. IndiaMart provides lead-generation services to sellers listed on its platform and earns revenue through subscription fee paid by the sellers.

As of financial year 2018-19, the company had 55 lakh sellers listed on its platform with products across 97,000 categories. The number of suppliers using paid services has increased from 72,000 in financial year 2015-16 to 130,000 in 2018-19, Angel Broking said in a note.

IndiaMART InterMesh to debut on July 4; will it be a bumper listing?


Most analysts expect IndiaMART to list with at least 10 percent premium over its issue price given strong demand and allotment ratio

After a great response to public issue last week, IndiaMART InterMESH is set to make its debut on bourses on July 4.

The company after consultation with merchant bankers fixed final issue price at Rs 973 per share, the higher end of the price band.

The public issue, which was opened for subscription during June 24-26, was subscribed 36.21 times by receiving bids for more than 9.74 crore shares against IPO size of 26.92 lakh shares.

IndiaMART, India’s largest online B2B marketplace for business and services of mainly MSME segment, raised Rs 476 crore through public issue.

Most analysts expect IndiaMART to list with at least 10 percent premium over its issue price given strong demand and allotment ratio.

“Looking at the demand and allotment ratio we expect IndiaMART to list anywhere around 12-15 percent premium on the issue price,” Prashanth Tapse, AVP Research at Mehta Equities told Moneycontrol.

Kuber Chauhan, Research Analyst at BP Wealth also said IndiaMART being a largest online B2B marketplace for business products and services, is likely to see the listing price at around Rs 1,118.

However, not all recommend buying the scrip. At one hand, Rajnath Yadav, Research Analyst at Choice Broking said one can buy at issue price or 10 percent above issue price; on the other hand, Kuber Chauhan, Research Analyst at BP Wealth asked investors to avoid.

Here are detailed views by analysts who spoke to Moneycontrol:

Tausif Khurshid Shaikh, Research Analyst at Way2Wealth Securities

IndiaMART InterMESH might make a listing debut at around 10-12 percent premium over its issue price, having received a good response.

We advise investors’ not to hurry their buying decision as the stock may see profit booking from short-term investors. The company has recently turned profitable, and it is better to watch its performance for a few quarters to get a clear picture of its growth trajectory and financials.

Prashanth Tapse, AVP Research at Mehta Equities

Looking at the demand and allotment ratio we expect IndiaMart to list at anywhere around 12-15 percent premium.

Investors with a higher risk appetite may consider holding and wait for 3-6 months for more optimistic return on investment. If in any case, the listing is around or below Rs 1,080, one can consider this as buying level.

Astha Jain, Senior Research Analyst at Hem Securities

We are expecting a strong listing of IndiaMART with an upside of almost 12-15 percent above issue price. One should hold the stock in our view and if anyone wants to buy on the listing day then it is a good buy at around issue price or 3-4 percent above issue price.

For one year, we are expecting the stock to give 30-35 percent return as the company has enough cash and a strong balance sheet.

Rajnath Yadav, Research Analyst at Choice Broking

We expect the stock to list with 10-20 percent premium over issue price and the outlook is bright.

One should remain invested for a long term and if one wants to buy, then one can buy at issue price or 10 percent above issue price.

I expect 30 percent return from issue price over a period of one year on strong operating leverage.

Kuber Chauhan, Research Analyst at BP Wealth

We expect the listing price to be Rs 1,118. We have given an avoid rating and one shouldn’t go for it. Looking at the business model, IndiaMart depends on the third party service providers for the major portion of its operations, which can have an adverse effect due to systemic and operational disruptions.

Therefore, we believe the future growth potentials are much more important than profitability. On valuations aspect, we feel IndiaMart is quite expensive.

We have calculated the forward earnings for FY21E and we expect a fair value to buy at a discount of Rs 826 backed by immense completion and dependency on other parties.

Disclaimer: The views and investment tips expressed by investment experts on are their own and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.


#4 Reasons Why IndiaMART’s IPO was Oversubscribed

Entrepreneur India

On the final day, the IPO was oversubscribed almost 36 times

The general election is finally over and the companies are back in action to raise funds from the capital market. Earlier this week, during the final day of its issue, IndiaMART InterMesh saw an extremely warm response from investors.

According to NSE, on its third day, the IPO was oversubscribed almost 36 times and received bits of 9,66,86,235 equity shares on the final day. The total issue size was 26,92,824 equity shares. As the issue is an OFS, IndiaMART will not receive any proceeds from it.

With the IPO, the company planned to raise around INR 475 crore. The lower band on stocks exchange was at INR 970 per piece and upper band INR Rs 973 per piece.

According to reports, IndiaMART was the second most successful IPO in 2019 and here are the five reasons why IndiaMART IPO could break the ceilings.

The Industry

As per a KPMG report, the digital classifieds market has recorded growth at a CAGR of 29.5 per cent between FY2017 to FY2022, which is mainly driven by the B2B segment along with real estate and automobiles. On the other side, the B2B segment is estimated to touch INR 11.9 billion by FY2022.

“This market size only consists of revenues from online B2B classified websites, which are involved in the listing, discovery and matchmaking of businesses on their platform. However, given the large market of online search in India, the same also represents a large potentially addressable market for online B2B classified platforms,” the report added.

The Company

Started by Dinesh Agarwal with a seed capital of merely INR 40,000 in the year 1999, IndiaMART today is the largest B2B marketplace operating mainly in the MSME space. 

As of March 31 2019, IndiaMART recorded 82.70 million registered buyers who have access to 5.55 million suppliers in India. These suppliers list over 60 million products and services across 54 industries. Furthermore, the company has around 1,30,000 customers using its paid services and has clocked in a revenue of INR 507 crore in FY 2019.

ICICI Securities’ Research Analyst Devang Bhatt and Deepti Tayal, in their report, say strong brand recognition and market position creates the following positive effects of a strong network and creating community effects through large numbers of product and service listings on its marketplace. 

“IndiaMART’s vast and vibrant network of buyers and suppliers allows it to act as an enabler of scale in the Indian B2B e-commerce sector,” the duo added.

The Target Audience 

Presently, there are over 51 million MSMEs in the country and of which, KPMG notes that 10 million are digital ready. As the number is bound to increase, IndiaMART is likely to expand its customer base and register more users.

“Benefits of online listing like enabling access to a customer base beyond local market/ reach and better information on competitors and their offerings may drive the online classifieds demands,” the KPMG report noted.  

The Digital First Outlook

IndiaMART’s mobile website and app accounts for more than 70 per cent of its total traffic and the company witnessed more than 396 million in FY2018. 

SMC in its reports points out that IndiaMART plans to continue its investment in its mobile platforms by further developing and integrating lead management system applications, user interface and notifications, customer services provided through instant messaging, GPS location capabilities, voice search technologies and other personalization features in its IndiaMART app. 

IndiaMART also optimizes data analytics and artificial intelligence to understand the behaviour of suppliers and buyers on its marketplace for improved user experience.

IndiaMart InterMesh IPO receives strong demand

Capital Market

Stock market concept with oil rig in the gulf and oil refinery industry background,Double exposure

The initial public offer (IPO) of IndiaMart InterMesh received bids for 9.74 crore shares, National Stock Exchange of India (NSE) data showed. The IPO was subscribed 36.21 times.

The qualified institutional buyers (QIBs) category was subscribed 30.83 times. The non-institutional investors category was subscribed 62.13 times. The retail individual investors (RIIs) category was subscribed 14.07 times.

The issue opened for subscription on 24 June 2019 and closed on 26 June 2019. The price band for the issue was Rs 970 to Rs 973 per share.

Ahead of the opening of the IPO, the board of directors of the company at its meeting held on 21 June 2019, finalized allocation of 21.95 lakh equity shares to anchor investors at Rs 973 per share. 

The IPO comprised offer for sale of 48.88 lakh shares. It included an offer for sale of up to 33,20,753 equity shares by the investor selling shareholders, 14,30,109 equity shares by the promoter selling shareholders and 1,37,000 equity shares by the other selling shareholders. 

The objects of the issue is to get the benefits of listing the equity shares on the BSE and the NSE and to enhance its visibility and brand image and provide liquidity to its existing shareholders.

The proceeds from the offer will be paid to selling shareholders and the company will not receive any such proceeds.

On a consolidated basis, IndiaMart InterMesh reported net profit Rs 20.04 crore on net sales to Rs 507.42 crore in the financial year ended on 31 March 2019.

IndiaMart InterMesh (IM) is India’s largest online Business-to-Business (B2B) marketplace for business products and services. IM enjoyed 60% market share in online B2B classifieds space in India in FY2017, according to KPMG report commissioned by the company.

IndiaMART’s $68 Mn IPO Is Oversubscribed 36X Since Monday


$68 Mn worth IndiaMART IPO began on June 24
IndiaMART has also reserved 10K shares for eligible employees
The company will sell a total of 1.4 Mn shares in the IPO

Image Credit: DNA India

While being the first online B2B marketplace for business products and services to float an IPO was not recognition enough for IndiaMART, it added yet another feather to its cap on June 26, the closing day of bids for its IPO, getting oversubscribed by 36 times.

This is one of the highest subscriptions any Indian internet company has got so far while listing on NSE and BSE. In 2013, JustDial’s IPO was oversubscribed 11.63x while Infibeam IPO got oversubscribed by 1.11x in 2016.

The bids for $68 Mn worth IndiaMART IPO began on June 24 at an INR 970 – INR 973 per equity share and the listing will happen on July 4, 2019. IndiaMART has also reserved 10K shares for eligible employees and offering them a discount of INR 97 per share.

The company will sell a total of 1.4 Mn shares in the IPO. Other existing investors such as venture capital investors Intel Capital, Amadeus Capital Partners, and Quona Capital will also be offloading a part of their shares through the IndiaMART IPO.

According to a company statement, Intel Capital will sell 2.07 Mn shares, while Amadeus IV DPF, and Accion Frontier Inclusion Mauritius will be selling 170.5K and 475K equity shares respectively.

Incorporated in 1999 by Brijesh Agrawal and Dinesh Chandra Agarwal, IndiaMART InterMESH Limited is an online B2B marketplace to deal with business products and services. It is an online platform for business buyers to connect with suppliers of the products and services.

As on March 31 2018, the company had 4.72 Mn supplier storefronts with listed50.13 Mn products and 59.81 Mn registered buyers. The company earns revenue primarily by selling the subscription packages which are available for a month, year and multi-year. In addition, the company also generates revenue by advertising, sale of RFQ credits and payment facilitation service.

It competes with the likes of and Alibaba India. Other players include JustDial, Google, Industry Buying, Power2SME, Moglix and Bizongo. Over the last three financial years, the company has shown stability in its financials.

According to Dilip Davda, contributing editor at, an IPO review platform, for the last three fiscals, IndiaMART has on a consolidated basis posted turnover/net profits – (Loss) of INR 331.94 Cr / (INR 64.35) Cr (FY17), INR 429.53 Cr / INR 54.76 Cr (FY18) and INR 548.39 Cr / INR 20.04 Cr (FY19).

“IndiaMART is a first mover in providing a platform for MSMEs as B2B online trading platform and is taking forward Digital India movement in a right spirit. According to a market survey, while an online B2B segment is growing, B2C is also expected to fall in line. Thus IndiaMART being the largest online trading platform provider is set to ripe benefits,” he added.

Dailyhunt | Pixr8

For B2B startups, IndiaMART IPO might drive investment and exit sentiment

Financial Express

IndiaMART belongs to the first generation of internet companies such as Just Dial, Info Edge (India), MakeMyTrip etc., that scaled in a bootstrapped environment and in a linear fashion with tightly-run operations without having sleepless nights over valuations and discount-driven customer acquisition.

IndiaMART turned profitable in FY18 with Rs 55 crore in net profit that declined to Rs 20 crore in FY19. (Image:

On one hand, there are startups, which emerged in over a decade and quickly leapfrogged their value to multi-billion dollars with their hyper-funded non-linear growth under the glory of famed venture capitalists and fuel by deep discounts with questionable loyalty and business model to an extent. On the other hand, there are companies such as Just Dial, Info Edge (India), MakeMyTrip on the B2C e-commerce side and IndiaMART on the B2B e-commerce side, which have emerged and been built in a bootstrapped environment and grown in a linear fashion with tightly-run operations without having sleepless nights over valuations and discount-driven customer acquisition.

Strong and Steady

While the ones on the B2C side had already chosen IPO as their road to the next level of growth, IndiaMART, among the oldest B2B e-commerce companies in India too have found its rightful place in public listing with the recent IPO that performed good — subscribed by nearly 36 times on the last day of bidding this week.

IndiaMART, in terms of business performance, had 55 lakh sellers on its platform with products listed across 97,000 categories as of FY19. Its paid supplier base increased from 72,000 in FY2016 to 1.3 lakh in FY19 at a CAGR of 21 per cent while its revenue grew at 29 per cent CAGR to Rs 507 crore during FY14-19, as per Angel Broking. The company turned profitable in FY18 with Rs 55 crore in net profit that declined to Rs 20 crore in FY19. IndiaMART had 8.27 crore registered buyers as of March 31, 2019. The company was founded in 1996 by Dinesh Agarwal and Brijesh Agarwal.

Ecosystem Play

While the IPO for IndiaMART validates its strong business fundamentals but it also directs towards the broader B2B e-commerce ecosystem in India. “It is a very inspiring story as the company fought through infrastructure and regulatory problems that existed in the last two decades to get to the IPO successfully. India needs a lot of such stories to keep coming up,” Abhishek Goyal, co-founder, Tracxn told Financial Express Online.

To put in perspective the B2B startup ecosystem in India, the country saw growth from only 900 B2B tech startups in 2014 to whopping 3,200 in 2018 witnessing 30 per cent compound annual growth between 2014-18. Moreover, the country has around five B2B unicorns including Udaan, InMobi, Freshworks, Delhivery, and BillDesk.

However, out of these 3,200 startups, 70 per cent of them belong to pure technology areas including enterprisetech, fintech, and healthtech while fewer are into industrial sector etc., said a report by management consulting firm Zinnov and hybrid cloud data services provider NetApp in May this year.

B2B startups have traditionally been seen as unviable businesses with a long sales cycle and longer runway to growth. “There is a lot of misconception around B2B companies viability. It is also assumed that B2C companies scale better in India but that’s not true because we are growing in the B2B space as well and have also increased multifold from the funding perspective,” Ajeya Motaganahalli, Senior Director and Leader, NetApp Excellerator, NetApp had told Financial Express Online.


Coming back to IndiaMART, the IPO is expected to better investors’ sentiments towards emerging companies in the B2B procurement space where there are startups including IndustryBuying, Moglix, and mid-size companies like Power2SME.

“When it comes to India B2B story and the opportunity in the unorganised-to-organised segment, classic B2B supply chain or B2B e-commerce verticals, IndiaMART IPO is a great development. In these areas, IndiaMART will definitely drive the sentiments for investors to enhance their commitment to related startups. The fact that IndiaMART has grown to IPO gives comfort that the management has a wise head on its shoulders and that it is in for the long term and can survive any downturn,” Deepak Natraj, managing director, Aarin Capital told Financial Express Online. Aarin Capital is co-founded by former Infosys CFO, TV Mohandas Pai.

Indeed the company is in for the long term. In B2B, there are primarily three kinds of models — ad-driven, classified kind of a model, and transaction-driven model. “While there is a larger shift from classified to transaction-based model, we believe that the digital ad market is also large enough. This translates to a larger road for players like IndiaMART. It was the early mover in the ecosystem when the B2B digitisation wasn’t very high,” Ujjwal Chaudhry, Director, RedSeer Consulting.

Beyond investment, for IPO too, there would certainly be a set of B2B companies that would be looking to take that route. “With IndiaMART there is certainly a positive sentiment for going for IPO instead of an M&A because the promoter sees giving more meaningful exit to investors. In general, too B2B space would have better unit economics compared to B2C space and hence it is beneficial to go IPO path instead of having hyper growth with a higher burn,” added Chaudhry.

The making of IndiaMart from Rs 40,000 to Rs 474 crore IPO


In this exclusive, in-depth story read how Dinesh Agarwal, Founder & CEO of IndiaMart InterMesh, founded this B2B ecommerce company in the early days of the internet era, how he scaled his business, and what the IPO means for him personally.

There’s a right time and a right place for everything. And for B2B ecommerce marketplace IndiaMart InterMesh, ‘apna time’ has come.

Dinesh Agarwal, Founder & CEO of IndiaMart InetrMesh.

The 23-year-old company that was set up at the height of the dot com boom and went on to survive the bust, launched its Initial Public Offer (IPO) on June 24, 2019, with a price band of Rs 970-973 to raise over Rs 474 crore. The company has offered 48,87,862 equity shares in the issue, which closes on June 26.

Founded by cousins Dinesh Agarwal and Brijesh Agrawal in 1996 with seed money of Rs 40,000, IndiaMart InterMesh is an online B2B marketplace for business products and services, connecting buyers with suppliers. The company focuses on providing a platform to Small & Medium Enterprises (SMEs), large enterprises, as well as individuals.

As of FY18, IndiaMart had close to 5.98 crore registered buyers and a catalogue of over five crore products, supplied by over 47 lakh suppliers. Its mobile app has close to 10 million downloads to date on the Google Play Store.

A new start

Speaking to YourStory in the midst of a hectic schedule a day before the IPO subscription closes, 50-year-old Dinesh Agarwal said he was nervous but at the same time expressed his happiness at this milestone his company has achieved. 

Talking about the happy culmination of a business journey that was anything but smooth, Dinesh says, “Abhi toh ek din baki hain (there’s one more day to go). Yesterday, half of the IPO got subscribed.” Dinesh adds that by the end of tomorrow, he hopes they will be “multi-times oversubscribed”.

“The company does not make money, I also do not make money, so what does it mean to me?” he responds with a question to the one I pose him related to his expansion plans. Over a phone call from Delhi, where he lives and where his company is headquartered, Dinesh says,

“I want to take the company to the next level. I have been at it for the last 23 years as a private company. We’ve seen multiple ups and downs, been profitable, made losses, and raised a couple of rounds of private capital. I think in the next 23 years, I want to see how a public limited company works.”

Away from all the limelight, unlike the B2C ecommerce companies, IndiaMart slogged away one customer, one business innovation at a time. No wonder then the question on most people’s minds is, what worked for IndiaMart?

There’s, of course, the resilience, perseverance, and hard work.

But Dinesh’s first thought goes to his early employees, family, and friends. “They were with me all through. Today, I have about 100 people who are working for me for more than 10 years now. Of course, staying on course and getting traffic to our website (we were early adopters of the SEO and did not believe in spending any marketing money) were some other things that worked for us.”

He especially emphasises the fact that they kept away from the new-age internet businesses’ way of doing things.

“The traditional profit and loss mindset also worked well for us. We were not into the valuation game, rather more of a self-sustainable inning. Frankly, I didn’t know the valuation game. I was not exposed to that.” 

A role model

A regular at TiE Delhi events, Dinesh today keeps a sharp eye on startups. As an angel investor, he has invested in 45 different firms so far in different sectors, including healthtech and cloud telephony.

Co-founders of IndiaMart Brijesh and Dinesh Agarwal.

Those who have interacted with him and heard him at numerous startup events will vouch for his inherent wisdom and humour delivered in his inimitable style.

No wonder there was a barrage of wishes for him on social media from investors and fellow entrepreneurs alike. 

Congratulating him on Twitter, serial entrepreneur and Founder of Portea Medical K Ganesh said, “Great role model to emulate for entrepreneurs. Patiently staying the course and building a great company.” 

Co-founder of SlideShare Amit Ranjan tweeted, “You’re a startup role model for demonstrating how to build an internet company in India. For 20 years now, whenever I search for any B2B thing on Google, I land on IndiaMart – shows the impact of what you’ve built!”

Quoting well-known Silicon Valley entrepreneur and investor Naval Ravikant (“Pick an industry where you can play long term games with long term people”), Abhishek Rungta of Indus Technologies, paid a tribute to IndiaMart’s resilience. 

It’s a marathon

There are no two ways about the fact that this seemingly overnight celebratory success has come after 23 long years of hard work and perseverance. 

Recalling the early days when the internet was akin to a mirage in India, Dinesh tells me how his mother and wife and most of the other household would answer enquiries from buyers outside India that came over email by writing mailers and posting them with the printed queries to Indian sellers. Dinesh recalls,

“Every day, approximately 200 mailers would be taken to the local post office to be mailed to the sellers. The post office guys would ask us to segregate them since it was too much for them. That’s not all; they would say now that you are here, ‘chai, pani kara ke jao’ (a euphemism for a petty bribe).”

He adds that this “heavy lifting” continued for close to seven years. When the dot com bust happened around 2000, Dinesh says it was good for them.

“I have a saying that the incumbents who survive the boom, and the startups who survive the bust, they go a long way.” 

Having walked this talk, Dinesh along with Brijesh has led IndiaMart through many ups and downs. 

Dinesh, at his new office, with his wife (standing behind) and family members.

In the first 10 years, the company did not raise any money and was primarily serving foreign buyers. In 2001, in the aftermath of the 9/11 US terror attacks, IndiaMart’s business saw a sudden slump. Dinesh says they stuck to their path despite having to lay off staff, “and once we came out of it, we were doing good”.

Around 2007-2008, the two founders saw a bigger opportunity in the domestic market. “We realised things were changing in India and wondered how we could be a Rs 500 crore company,” says Dinesh.

The company went on to raise money (it had raised a total of $40.7 million in funding over four rounds) and scaled quickly. But in 2011, the company faced yet another slump, which it managed to tide over, and by 2012, it had its neck above waters. He says,

“B2B businesses are probably difficult to build, but easy to scale. However, once they scale, they are easily profitable.”

In 1996 when the cousins started IndiaMart, there were only around 15,000 internet users in India. “We have been believers of ecommerce for a long time. Nirula’s was our first big client. Around 1999, we were probably the first company to launch ecommerce shopping. We were delivering sweets during Diwali. But over time, we realised that B2C kind of businesses is tough to make money. So we focused by and large on B2B business.”

Early days

According to popular wisdom, it’s the choices that make an entrepreneur more than their abilities.

It will be both interesting and instructive to trace the early days before Dinesh hit upon the idea of starting IndiaMart. 

A young Dinesh practicing the art of balancing growth and scale.

Hailing from Nanpara, a small town near the India-Nepal border in Uttar Pradesh, Dinesh was influenced by his freedom-fighter and forward-thinking grandfather. After completing his BTech degree in Computer Science from HBTI (Harcourt Butler Technological Institute) in Kanpur, his first job was at CMC (now part of TCS) where he worked on the first Railway reservation system. 

“Because of the early exposure to computers, I was convinced that computers and telecom were going to be revolutionary,” Dinesh says. 

His tryst with technology led him to the US, where he worked at HCL Technologies. While working on a project, he was, for the first time, exposed to the power of software. 

“At a project site, I saw a woman working on a Windows software and wondered what that was. We were also using the internet but it was mostly text-based, it was not http,” recalls Dinesh. When he saw that with one click, the woman was able to open images, there was a sudden epiphany that “software was eating the world”. 

Dinesh says that he could actually visualise (and only articulate now) what Marc Andreessen had penned five years ago about the power of software. “At that moment, I had that vision of Vishnu where the entire universe is gushing into his mouth — the convergence feeling,” he says, describing the moment that seems to be imprinted in his mind.

In August 1995 when VSNL (Videsh Sanchar Nigam Limited) launched public internet access in India, Dinesh says he knew he wanted to go back home. He resigned a year later and returned to become an internet entrepreneur. But India was far from the rosy picture that he had painted in his mind. He says,

“It took us six to nine months to get a telephone connection. I started going to trade fairs to figure out what kind of business I could start and explored ideas ranging from a computer shop, hardware and software distribution, cyber cafe, NIIT-type education, building websites, and such.”

Though he zeroed in on making websites for companies, he later figured there were very few internet users and wondered who would visit these websites. “It was then I realised that in the US, Indian products were difficult to find, and even if you found them, they were expensive.”

From garments to agarbatti, there was no information on exporters. The thought struck, why not make the directories of these exporters available online. “That’s how the idea of IndiaMart, a global gateway to Indian marketplace, was conceived,” Dinesh adds.

Though it was not as simple since they needed permission to get the directories of exporters and sellers online. “Government offices ke bahut saare chakkar lagaye (made multiple rounds of government offices), but we did not get any permission. So then we decided to have a free listing form and sent it to all the sellers in the directories. My whole family, including my mother and wife, would help with the mailers.”

A new start from finishing line

No wonder, for Dinesh, personally, the IPO is more of a fulfillment.

“I want to create a long-lasting, forever company. I want it to be the backbone of the Indian economy. Today, about half a percent to one percent of India’s GDP is close to IndiaMart’s. So I am looking at how I can make it 10X, and how I can make IndiaMart a dependable source for small and medium businesses.”

A champion of small and medium business, Dinesh notes that these businesses do not have a voice.

“There are trade bodies and associations, but they cater to a small group. In a country where there are 1.25 crore registered GST businesses and four times that businesses in the unorganised sector, nothing comes easy to them. They are self-motivated and self-sustained. All they need is simple technology to develop their industries. Mujhe bhi kuch kaam karne ko rahega (I will also have some work to do). That’s what I feel from my heart,” he says.

Even as he has his work cut out for the next leg of his journey, Dinesh says celebrations for the IPO is reserved for tomorrow.

“By tomorrow afternoon onward, we will celebrate on every ball,” he says. The IPO subscription closes on June 26.

“Right now, it is a nail-biting live subscription that we are watching. It will all start pouring in by tomorrow,” he adds. Which is when he will raise a toast with his family and look at beginning a new journey.