SMW Ispat, a steel producer, is being acquired by OfBusiness
- ByStartupStory | March 25, 2022
OfBusiness, a business-to-business (B2B) commerce company, has applied to the Competition Commission of India (CCI) for permission to buy a controlling stake in SMW Ispat, a TMT steel maker. The deal size was not disclosed in the CCI application by OfBusiness. According to sources familiar with the situation, OfBusiness’ parent company, OFB Tech, is buying 100 percent ownership in SMW Ispat, primarily to acquire its important brand, Sangam TMT.
According to OfBusiness, the purchase does not raise any concerns about competition. OfBusiness, which is backed by SoftBank, raised $325 million in December, bringing its total capital raised in 2021 to $800 million.
The Startup Story reported earlier this week that Oxyzo Financial Services, the company’s financial services arm, had raised $200 million in its first round of funding, valued at $1 billion.
Asish Mohapatra, co-founder, and CEO of OfBusiness, told ET in December that the new money would be used for a wave of acquisitions. On Friday, Mohapatra declined to comment on the SMW Ispat agreement. The raw material supply chain is OFB Tech’s core business, which includes food grains, metals, polymers, petrochemicals, industrial chemicals, and building materials.
SMW Ispat, situated in Maharashtra, operates a 40-million-tonne induction furnace that produces TMT bars, steel billets, and sponge iron. Sangam Steel, a trademark of SMW, has an iron ore beneficiation plant with a daily capacity of 2,000 tonnes.
The steel sector has been a bright spot for investors and experts, with benchmark HRC (hot-rolled coil) steel prices reaching an all-time high of Rs 80,000 per tonne and rebar prices exceeding Rs 75,000 per tonne. Automobiles, transformers, and white goods are made with HRC steel, whereas rebars such as TMT are utilized in construction.
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