Working Capital Optimization
FMCG supply chain experienced significant liquidity bottlenecks with average invoice collection cycles stretching to 85 days.
Sourced a structured Bill Discounting and Cash Overdraft limit structured against invoice receivables.
Unlocked ₹18Cr in working capital flow, lowering collection cycle gaps and improving vendor payment metrics.
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 analyzed the company's receivable book and identified that 80% of outstanding invoices were from investment-grade retail chains — ideal for 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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