IndiaMart, the 23-year-old business, which was established at the height of the dot com boom and continued to endure the bust, introduced its Initial Public Offer (IPO) on June 24, 2019 with a price band of Rs 970-973 raising over Rs 474 crore. In the bid, which ends on June 26, the firm provided 48,87,862 equity shares.
IndiaMart: The Early Days
Dinesh Aggarwal during the early days of IndiaMart (image courtesy corporate.indiamart.com)
Founded in 1996 with seed money of Rs 40,000 by brothers Dinesh Agarwal and Brijesh Agarwal, IndiaMart InterMesh is an internet B2B marketplace for company products and services that connects customers to providers. The firm focuses on offering Small & Medium Enterprises (SMEs), big businesses, and people with a platform.
At FY18, IndiaMart had nearly 5.98 crore registered customers and a catalog of more than five crore products provided by more than 47 lakh vendors. Its mobile app on the Google Play Store has nearly 10 million downloads to date.
Dinesh Aggarwal: The Happy Founder
Dinesh Aggarwal is from a business family, but he didn’t have any plans to become one. So, after graduating from the Harcourt Butler Technological Institute, Kanpur, with a B.Tech degree in computer science, he took up a position at HCL Technologies as a system analyst. He then collaborated with other companies in India for five years and then went to the US where he collaborated with CDOT for three years. “I have been earning a good salary and leading a very comfortable life, but all my life I couldn’t imagine doing the same work,” says Mr. Aggarwal. He felt like he was beginning his own business. He chose to stay in 1996 because all his family and colleagues were based in India.
Since he was a computer analyst and he thought about beginning something in software services among the early Internet consumers. He set out to build a business platform to show their products through devoted web pages. He appointed the company InterMesh, IndiaMart. The concept was to assist sell their products and services to small and medium-sized enterprises in the nation. He bought a Delhi apartment while he was living and set up his flat desk in 1996.
Having proven to the companies the importance of Web existence, we would then give them a customized, complete service to allow them to attract even larger figures for their business. This approach has helped IndiaMart to bag several customers. “We had employees of nine by the end of the first year (1996-97), and the company reported a turnover of about Rs 6 lakh,” says Mr. Aggarwal.
The early problems for IndiaMart:
He had Rs 40,000 savings and it’s been spent in the company. The company started experiencing a number of difficulties. The machines were expensive and they were used by a few companies. So, it was quite a challenge to convince clients to purchase pcs first, which, in turn, would assist promote their company. Furthermore, in those days the Internet speed was very slow. It would take a few hours to upload and download tiny documents. Still, as their first customer, they managed to get the fast-food chain, Nirulas. The agreement was for an annual charge of Rs 32,000 to create and handle their website.
As the company began to grow, they had to cope with several problems, and the most irksome among them was the search for greater office room. That’s why they altered four branches between 1996 and 1999. In addition, they had to spend nearly Rs 50,000 for every worker employed as it meant buying a fresh laptop and appropriate equipment, which proved to be quite costly. Although most of the queries about the companies of our customers would come to us via SMS, very few customers had the email facilities. They had to save the request, bring a printout and fax it to the client. It was quite complicated but they were able to do it.
IndiaMart’s time to become an ever-expanding business
The CEO treats his employees as his family that grows together (image courtesy: indiaMart.com)
The company launched its second Mumbai office in 1998. They added about 1,000 customers to their list by 1999. The company had approximately 100 employees. One of the factors that enabled the company to develop is their workers ‘ devotion. “Several of the employees who joined us at the company’s start are still with us. Our company income dropped by approximately 40% after the US terror assault on September 11, 2001. Paying wages was hard, but none of our staff left, and together we overcame the decline. We now have 50 branches in the country’s 20 towns and 2,500 employees. Of these, 800 staff are employed at our Noida headquarters, Uttar Pradesh”, says Mr. Aggarwal.
They spent Rs 7 crore in 2007 in buying a two-acre Noida property and building a fresh office. They have about 1 crore and nearly 15 vendors of lakh. Every month as many as 1 crore customers check the platform of the company. They also developed a buyer-dedicated forum in 2011, building on the supplier platform. A customer can publish on the website his request and their search technology can assist him locate the correct provider. In this undertaking, they see an enormous opportunity.
The firm produced a turnover of approximately Rs 200 crore in 2013-14. They are increasing at an average of 30% year-on-year and hope to maintain this pace of development.
Away from all the limelight, IndiaMart slogged afar one client, one company development at a moment, unlike the B2C e-commerce businesses. So no surprise the issue about the minds of most people is, what worked for IndiaMart?
The resilience, perseverance, and hard work are, of course!
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