Working Capital Optimization
The FMCG supply chain was starved of cash, with invoices taking an average of 85 days to collect.
We arranged a Bill Discounting line and a cash overdraft, both secured against invoice receivables.
The working capital cycle dropped 35% and freed up ₹18Cr in liquidity.
Understanding the situation
The FMCG group was supplying to large retail chains with payment terms of 60-90 days, creating severe cash flow gaps for daily operations.
Vendor relationships were deteriorating as the company couldn't meet payment timelines, risking supply disruptions.
Existing banking limits were fully utilized, and the company's stock-heavy balance sheet made additional collateral-based lending difficult.
How we solved it
We went through the receivable book and found that 80% of outstanding invoices were from investment-grade retail chains, which are well suited to bill discounting.
We structured a dual facility: a Bill Discounting line against confirmed receivables and a Cash Credit limit enhanced with a second charge on existing stock.
We ran a competitive process across 5 banks and 3 NBFCs, ultimately securing the best terms from a combination of a PSU bank (for CC) and a private NBFC (for BD).
We also helped the company negotiate better payment terms with their top 3 retail clients, reducing average collection from 85 to 62 days.
Measurable outcomes
₹18Cr in working capital unlocked through structured Bill Discounting and enhanced CC limits
Average collection cycle reduced from 85 days to 62 days
Vendor payment cycle improved from 45 days to 22 days, strengthening supply chain reliability
The company's working capital turnover ratio improved from 4.2x to 6.1x within two quarters
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