Oxyzo Reports Strong Growth and Profitability in FY24

Oxyzo Financial Services, a prominent B2B fintech unicorn, achieved impressive growth during the fiscal year ending March 2024 (FY24). The company, backed by investment firm Tiger Global, witnessed a 58.4% year-on-year increase in revenue from operations, reaching Rs 903 crore compared to Rs 570 crore in FY23. This growth was mirrored by a significant rise in profits, with net income nearing Rs 300 crore, representing a 47% increase from the previous year.

Fueling Growth Through Lending Solutions

Oxyzo, the lending arm of the industrial goods and services procurement platform OfBusiness, provides credit solutions and loans to small and medium-sized enterprises (SMEs) and startups. The company’s core revenue stream stems from interest received on loan disbursements, which contributes significantly to its financial performance. In FY24, interest income accounted for 96% of Oxyzo’s total operating revenue, surging by 61.3% to reach Rs 866 crore. Fees and commissions, representing a minor portion of revenue, also saw a 50% increase to Rs 36 crore during the same period.

Managing Costs for Continued Profitability

Finance costs emerged as the largest expense category for Oxyzo, constituting 61.67% of its total expenditure. These expenses grew at a significant rate of 73.2% to reach Rs 317 crore in FY24. The company also experienced a 48.7% increase in employee benefit expenses during the fiscal year. Legal and professional fees, advertising costs, technology investments, and other overheads collectively contributed to a 66.3% hike in total expenditure, reaching Rs 514 crore in FY24 compared to Rs 309 crore in FY23.

Profitability and Efficiency

Despite rising costs, Oxyzo’s focus on cost control and achieving economies of scale resulted in a 47% increase in net profit (PAT) to Rs 291 crore in FY24, compared to Rs 198 crore in the previous year. Notably, the company spent approximately Rs 0.57 to generate every rupee of revenue in FY24, demonstrating operational efficiency.

Financial Strength and Future Plans

Oxyzo claims to have concluded FY24 with a net worth of approximately Rs 2,600 crore, coupled with a healthy post-tax return on assets (RoA) of 4.5%. Additionally, the company boasts a low gross non-performing asset (NPA) ratio of 1.02%. Beyond expanding its balance sheet, Oxyzo intends to prioritize investments and development within its debt capital markets platforms to further serve its enterprise clientele.

Investment and Market Positioning

In 2022, Oxyzo secured approximately $200 million in funding and achieved unicorn status following its Series A round led by Alpha Wave and Tiger Global. According to startup data platform TheKredible, the OFB Group, including its promoters, holds a majority stake of 74.5%. Alpha Wave is the largest external shareholder with a 7.4% stake, followed by Tiger Global.

Similar to its parent company, Oxyzo has capitalized on a critical and profitable service within the B2B market it operates in. Its rising profitability positions it favorably to achieve its ambitious goals for its debt capital markets platform. This success story, characterized by a virtuous cycle of growth and profitability, is likely to garner increased investor interest and potentially lead to a surge in Oxyzo’s valuation in the near future.