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Shift to digitisation and e-commerce will fuel growth: Mjunction CEO

Vinaya Varma tells that the company eyes 40 per cent CAGR topline growth through 2023, betting on India's e-commerce boom

Jayajit Dash 

mjunction
mjunction

Mjunction, a 50:50 joint venture between and Tata Steel, has moved beyond its traditional strengths in commodities trade to embark on new businesses like real estate and sports solutions. It is also keen to partner Railways and its subsidiary to offer a platform for selling their scrap and idle assets. In this interview with Jayajit Dash, services limited's MD & CEO Vinaya Varma tells that the company eyes 40 per cent CAGR topline growth through 2023, betting on India’s e-commerce boom.

services has recently forayed into real estate vertical, auctioning commercial plots. Beyond UP, which other states are on your radar? Are you also looking at tie-ups with real estate developers?

entered the real estate sector with Uttar Pradesh Awas Vikas Parishad and currently, we are customising the platform for Uttar Pradesh State Industrial Development Authority (UPSIDA) where e-auctions will begin soon. After we consolidate our position in Uttar Pradesh, we will target other states.

How does mjunction intend to expand its sports solutions vertical? Beyond cricket, how do you aim to engage other popular sports?

There is a large opportunity for sports federations to bring in transparency and efficiency in several areas. We have a tie up with Sporty Solutionz to create digital solutions for cricket as well as other sports.

In the Railways sector, what bigger deals are you looking to seal? Any partnership on the cards with subsidiaries and Rail centric like Rites, IRCTC, or RailTel?

mjunction has worked very closely with Railways and for successful completion of projects like jungle clearance, inventorying, valuation and e-auction. The e-auction yielded Rs 94 crore for the Railways through disposal of various assets at Dalmianagar in Bihar. We are keen to partner with the Railways and its subsidiaries for providing a customised platform to sell their idle assets and scrap.

You have obtained the five-year contract for e bidding and allocation of oil & gas fields. How is this vertical progressing? Will it contribute to shoring up your margins in the near and long-term?

This is one of the very prestigious assignments for mjunction. The objective of this initiative by the Government of India is to reduce import of oil by 10 per cent. To achieve this, the Government of India has leased out 55 oils & gas blocks during OALP (Open Acreage License policy) Round 1 in 2018, 25 oil blocks during DSF (Discovered Small Fields) Round-2 in early 2019 through a competitive and secured bidding process. Bidders from India and foreign countries have participated in this bidding process with a possibility of around Rs 1 lakh crore investment in this sector. mjunction has executed this event flawlessly and after the successful execution in OALP Round 1 and DSF Round 2, DGH (Directorate General of hydrocarbons) has offered another 14 and 23 oil and gas blocks respectively for bidding under OALP Round 2 and OALP Round 3 offerings. This firmly establishes mjunction as a reliable service provider for e-bidding and e-procurement.

mjunction is known for its forte in online auctions of coal, steel and other bulk minerals. Are you witnessing muted volumes in these segments?

mjunction began its journey with steel, coal and other minerals and these continue to be its flagship businesses. Our steel business, in fact, grew 32 per cent y-o-y (year-on-year) in FY19. We are in fact planning to enter the primary steel market in a big way. The business continued to make inroads into new product segments, the latest being e-auction of automobile scrap. Steel business is also targeting international clients, in Asia and Europe.

Our coal business also showed y-o-y growth, and signed its first ever global e-auction contract with ICVL (International Coal Ventures Ltd) Mozambique, for auctioning thermal coal and Low Heat Value Coal from ICVL's Mines De Benga LDA Mine. It is also diversifying into other areas such as Systems integration of sand deposits and e-distribution of coal, which enables MSME consumers to avail the facility of buying coal from state-nominated agencies in a fair and convenient manner, without the intervention of middlemen or agents.

What is the estimated size of the e-marketplace in India and how is it growing year-on-year? What is mjunction's share in volumes and by value?

With increasing internet penetration, e-commerce is India’s fastest growing and most dynamic channel for commercial transactions. The Indian e-commerce market is expected to surpass the United States to become the second largest e-commerce market in the world; market is expected to reach $64 billion by 2020 and $200 billion by 2026 from $38.5 billion in 2017. This e-commerce market can be segmented into two major types, by type of customers – B2C and B2B. The same market can be categorised into two other types going by the service on offer – e-marketplace and inventory models of e-commerce. mjunction facilitates transactions in the marketplace between buyers and sellers through its e-auction platforms. On our platforms Rs 1.48 lakh crore was transacted as Gross Merchandising Value (GMV) in FY19.

What are mjunction's growth targets for the future? What factors will fuel your growth?

mjunction is targeting a topline CAGR (compounded annual growth rate) of 40 per cent by 2023. The Indian market is looking for aggregated industrial suppliers and the e-auction platform is geared for non-linear growth, supported by processes perfected over the years. The process of shift to digitisation and e-commerce will fuel the growth as well as the potential of e-commerce to reach $200 billion by 2027 in India. Internally at mjunction, growth of our e-auction businesses and internal funding of future expansions will fuel this growth.

Beyond traditional commodities, you have diversified to sports and real estate. What new businesses do you wish to add to your portfolio over the next five years?

We are working towards becoming one-stop shop to enterprises for their requirement of MRO (maintenance, repair & overhaul) items, such as Fasteners, pumps, compressors, light & light fittings etc. We are ensuring timely deliveries through digital connecting OEMs with enterprise buyers and plan to expand our portfolio to cover a large range of such items in the next few years.

First Published: Fri, April 26 2019. 13:20 IST
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