Latest news with #TReDS
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Business Standard
6 hours ago
- Business
- Business Standard
TReDS platform M1xchage eyes IPO in 3-5 years, aims ₹1.25 trn biz in FY25
M1xchage, a leading RBI-licensed Trade Receivables Discounting System (TReDS) platform, which is witnessing an 80-90 per cent annual growth in business, is planning to go public in the next 3-5 years. "Although the company has been profitable for the last two years, the initial public offering (IPO) is still a few years away. We would look at an IPO in 3-5 years, depending on market conditions," M1xchange Chief Executive Officer Sundeep Mohindru told PTI. M1xchage, which started operations in 2017, is aiming to close the financial year with a business of Rs 1.25 trillion. Factoring as a business is picking up very well as it is win-win for the banks, buyers and sellers, he said, adding that the business has been witnessing a growth of 80-90 per cent on an annual basis. During the current financial year, he said the business is expected to reach Rs 1.25 trillion. Last year, the volume was to the tune of Rs 78,000 crore as compared to Rs 43,000 crore in FY24. The platform is facilitating invoice financing of nearly Rs 10,000 crore each month, enabling MSMEs with faster access to working capital and driving adoption across corporates, vendors, and financial institutions. India's supply chain finance sector is witnessing accelerated growth, driven by the need for faster-working capital access for MSMEs and digital transformation across industries. With the Reserve Bank of India's (RBI's) TReDS framework, digital platforms are increasingly becoming the backbone of MSME financing, he said. The platform facilitates discounting of invoices and bills of exchange, or trade receivables of micro, small and medium enterprises from corporate and other buyers, through multiple financiers such as banks and non-bank entities. Factoring or invoice discounting refers to transfer in ownership or financing of accounts by a third party or factor at a discount for commission and fees, wherein the factor makes a profit upon the settlement of the debt. About funding for business growth, Mohindru said the company is well capitalised at the moment to drive exponential growth. Recently, growth-stage investment firm Filter Capital invested about $10 million (Rs 85 crore) in trade receivables discounting system platform M1xchange. Prior to this, Jindal Stainless, leading stainless steel manufacturer, along with its wholly owned subsidiary, Jindal Stainless Steelway Ltd, acquired a 9.62 per cent stake in M1xchange. This deal involved a combination of primary capital and a secondary purchase of shares from existing shareholders. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Economic Times
6 hours ago
- Business
- Economic Times
TReDS platform M1xchage plans IPO in 3-5 years
M1xchage, a leading RBI-licensed Trade Receivables Discounting System (TReDS) platform, which is witnessing an 80-90 per cent annual growth in business, is planning to go public in the next 3-5 years. ADVERTISEMENT "Although the company has been profitable for the last two years, the initial public offering (IPO) is still a few years away. We would look at an IPO in 3-5 years, depending on market conditions," M1xchange Chief Executive Officer Sundeep Mohindru told PTI. M1xchage, which started operations in 2017, is aiming to close the financial year with a business of Rs 1.25 lakh crore. Factoring as a business is picking up very well as it is win-win for the banks, buyers and sellers, he said, adding that the business has been witnessing a growth of 80-90 per cent on an annual basis. During the current financial year, he said the business is expected to reach Rs 1.25 lakh crore. Last year, the volume was to the tune of Rs 78,000 crore as compared to Rs 43,000 crore in FY24. The platform is facilitating invoice financing of nearly Rs 10,000 crore each month, enabling MSMEs with faster access to working capital and driving adoption across corporates, vendors, and financial institutions. ADVERTISEMENT India's supply chain finance sector is witnessing accelerated growth, driven by the need for faster-working capital access for MSMEs and digital transformation across industries. With the Reserve Bank of India's (RBI's) TReDS framework, digital platforms are increasingly becoming the backbone of MSME financing, he said. ADVERTISEMENT The platform facilitates discounting of invoices and bills of exchange, or trade receivables of micro, small and medium enterprises from corporate and other buyers, through multiple financiers such as banks and non-bank entities. Factoring or invoice discounting refers to transfer in ownership or financing of accounts by a third party or factor at a discount for commission and fees, wherein the factor makes a profit upon the settlement of the debt. ADVERTISEMENT About funding for business growth, Mohindru said the company is well capitalised at the moment to drive exponential growth. Recently, growth-stage investment firm Filter Capital invested about USD 10 million (Rs 85 crore) in trade receivables discounting system platform M1xchange. ADVERTISEMENT Prior to this, Jindal Stainless, leading stainless steel manufacturer, along with its wholly owned subsidiary, Jindal Stainless Steelway Ltd, acquired a 9.62 per cent stake in M1xchange. This deal involved a combination of primary capital and a secondary purchase of shares from existing shareholders. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
6 hours ago
- Business
- Time of India
TReDS platform M1xchage plans IPO in 3-5 years
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel M1xchage, a leading RBI-licensed Trade Receivables Discounting System (TReDS) platform, which is witnessing an 80-90 per cent annual growth in business, is planning to go public in the next 3-5 years."Although the company has been profitable for the last two years, the initial public offering (IPO) is still a few years away. We would look at an IPO in 3-5 years, depending on market conditions," M1xchange Chief Executive Officer Sundeep Mohindru told PTI.M1xchage, which started operations in 2017, is aiming to close the financial year with a business of Rs 1.25 lakh as a business is picking up very well as it is win-win for the banks, buyers and sellers, he said, adding that the business has been witnessing a growth of 80-90 per cent on an annual the current financial year, he said the business is expected to reach Rs 1.25 lakh crore. Last year, the volume was to the tune of Rs 78,000 crore as compared to Rs 43,000 crore in platform is facilitating invoice financing of nearly Rs 10,000 crore each month, enabling MSMEs with faster access to working capital and driving adoption across corporates, vendors, and financial supply chain finance sector is witnessing accelerated growth, driven by the need for faster-working capital access for MSMEs and digital transformation across the Reserve Bank of India's (RBI's) TReDS framework, digital platforms are increasingly becoming the backbone of MSME financing, he platform facilitates discounting of invoices and bills of exchange, or trade receivables of micro, small and medium enterprises from corporate and other buyers, through multiple financiers such as banks and non-bank or invoice discounting refers to transfer in ownership or financing of accounts by a third party or factor at a discount for commission and fees, wherein the factor makes a profit upon the settlement of the funding for business growth, Mohindru said the company is well capitalised at the moment to drive exponential growth-stage investment firm Filter Capital invested about USD 10 million (Rs 85 crore) in trade receivables discounting system platform to this, Jindal Stainless, leading stainless steel manufacturer, along with its wholly owned subsidiary, Jindal Stainless Steelway Ltd, acquired a 9.62 per cent stake in deal involved a combination of primary capital and a secondary purchase of shares from existing shareholders.
Time of India
15-05-2025
- Business
- Time of India
Rs 25 lakh crore MSME credit gap: TReDS has sparked hope for small businesses, but what's holding it back?
The Trade Receivables Discounting System (TReDS) platform has made notable progress in facilitating credit access to micro, small, and medium enterprises (MSMEs) in the country. However, industry experts and stakeholders believe that significant expansion is still required to further increase its reach and effectiveness. According to them, the TReDS platform must broaden its coverage, particularly after the recent reduction in the turnover threshold for mandatory buyer onboarding from Rs 500 crore to Rs 250 crore, which will include more buyers. Vijay Mani, Partner and Banking and Capital Markets Leader, Deloitte India, acknowledges the important role of the TReDS platform in facilitating credit access to MSMEs. However, he points out that India still needs to address a substantial credit demand-supply gap. India's MSME sector, comprising over 64 million enterprises, faces a substantial credit gap of Rs 20-25 lakh crore, with only about 20% having access to formal financing, according to experts. 'The TReDS platform meets less than 5% of the credit demandfrom MSMEs. While the secondary market for discounted invoices is a useful avenue for improved liquidity, the challenge in the way of credit penetration lies elsewhere, i.e., we still don't have enough coverage of corporate buyers or buying. For a meaningful increase in coverage, it may be necessary to offer incentives to the buyers and allay their concerns about data privacy,' explains Mani. Similarly,Anil Bharadwaj, Secretary General, Federation of Indian Micro and Small & Medium Enterprises (FISME), highlights some issues affecting the TReDS platform, suggesting that it requires improvement. 'By design, TReDS is a buyer-dependent platform. Buyers have not warmed up to the platforms because it illuminates their payment practices. The boarding process is also found to be onerous by small MSMEs, adds Bharadwaj. Live Events Bharadwaj also points out that while the TReDS platform enjoys popularity among corporates, its adoption by central public sector enterprises (CPSEs) is still limited. 'Analysis indicates that only 10% of the total transaction volume on the TReDS platform is attributable to CPSEs,' says Bharadwaj. Introduced in 2017, the TReDS ecosystem aims to address the huge credit gap in India's MSME sector by providing a digital platform designed to enable timely financing and alleviate issues related to delayed payments. M1xchange, RXIL, Invoicemart, C2treds, and KredX are the existing TReDS operators in India. What stakeholders say TReDS has seen significant growth since March 2018, with both the number of invoices and the amount financed consistently increasing, say stakeholders. In FY24, the amount financed through TReDS nearly doubled compared to the previous year, surpassing Rs 1.46 lakh crore. Over half a million invoices have been financed, with small enterprises accounting for the largest share at 39.05%. Medium and micro enterprises follow closely, contributing 33.21% and 27.74%, respectively, according to the RBI data. iStock In FY24, the amount financed through TReDS nearly doubled compared to the previous year, surpassing Rs 1.46 lakh crore. The TReDS platform has facilitated over Rs 5.33 lakh crore in financing since its inception. In FY25, the platform saw significant growth, facilitating over Rs 2.35 lakh crore in financing, a substantial increase from Rs 1.38 lakh crore in the previous year, says Sundeep Mohindru, Promoter and Director of M1xchange, who is upbeat about the scope of TReDS going forward. 'TReDS, through its growing adoption and policy support, is well-positioned to expand its share in bridging this gap in the coming years. Over Rs 1.50 lakh MSMEs are on the TReDS platform from over 2,200 cities,' adds Mohindru. Mohindru also shares how M1xchange has experienced growth in its customer base and transaction volume, solidifying its position in the TReDS ecosystem. The platform's significant increase in invoice discounting volumes highlights the growing adoption of TReDS and the rising demand from MSMEs for efficient working capital solutions, he says. Notably, M1xchange recorded a total throughput of Rs 78,000 crore in FY25, nearly doubling its volume from Rs 43,000 crore in FY24, and a rise from Rs 23,100 crore in FY23. 'This consistent year-on-year growth highlights the platform's ability to cater to the evolving financing needs of MSMEs and corporates alike. Notably, the second half of FY25 alone witnessed a 150% increase in throughput, surging from Rs 32,000 crore in H1 to Rs 46,000 crore in H2. March 2025 was a milestone moment for M1xchange, achieving Rs 10,000 crore in invoice discounting within a single month—the highest ever for M1xchange,' he says. However, Mohindru admits that despite progress, much work remains to raise awareness about TReDS benefits, such as faster and collateral-free working capital, among MSMEs in semi-urban and rural areas. Similarly, Basant Kaur, Country Head & COO of C2FO India, says that despite significant growth of TReDS over the years, it still addresses a relatively small portion of the massive credit gap in the MSME sector, and the opportunity is enormous. With enhanced policy support and broader ecosystem participation, TReDS can transition from a niche solution to a mainstream financing channel, effectively unlocking liquidity for India's MSMEs, adds Kaur. Both experts and stakeholders say that TReDS faces some challenges, including dependency on buyer approval, which restricts supplier-initiated discounting. Additionally, smaller MSMEs often lack awareness about TReDS or face onboarding difficulties due to limited digital literacy and documentation issues, they add. TReDS transactions lack credit insurance, making financiers cautious when dealing with lower-rated or long-tail suppliers. Furthermore, buyer-side inertia, especially among large corporations and PSUs, results in underutilisation despite mandatory registration requirements, say experts and stakeholders. 'Banks are adopting the TReDS model for financing the business of one small MSME to another small MSME. From a financier's perspective, higher perceived credit risks associated with discounting MSME invoices, particularly when buyers are unrated or operate in informal sectors, act as a deterrent,' says Mohindru. Mohindru also shares how M1xchange has implemented alternative credit assessment models, leveraging digital transaction data from MSME sellers on the TReDS platform, to help banks better underwrite risk associated with invoices. 'This not only enhances credit visibility but also improves investor confidence by creating a more transparent and data-driven financing environment,' adds Mohindru. Innovation and policy support needed As the TReDS ecosystem experiences robust growth, the next phase should prioritise innovations and supportive policies to enhance financial inclusion and bring more MSMEs into formal financing channels, say experts and stakeholders. Integrating the GSTN portal with TReDS , where invoices uploaded to GSTN are automatically routed to TReDS, could significantly streamline the payment process and ensure timeliness, they add. 'The government should actively encourage larger corporates to adopt TReDS, as their participation is crucial for driving growth and expanding the platform's reach. A few states, such as Goa, have mandated all their PSUs and departments to onboard TReDS. The RBI has already made a host of suggestions to expand the scope of services that could be delivered through TReDS. Last but not least, there is a need to incentivise companies with a turnover above Rs 250 crore to make transactions through TReDS,' adds Bharadwaj. Kaur suggests enabling credit insurance and allowing secondary market trading of discounted invoices on TReDS, as previously proposed by the RBI. 'Mandate transaction thresholds (not just onboarding) for buyers, especially those with turnovers above Rs 250 crore. Additionally, TReDS participation should be linked to ESG scoring and credit ratings for buyers to create non-fiscal incentives for early payments. With these measures, TReDS can help drive inclusive, scalable, and transparent financing for India's MSMEs,' says Kaur. Mohindru advocates for activating credit guarantee funds for factoring, which could further support the growth of TReDS and enhance financing options for MSMEs. 'This fund has been sanctioned earlier and is yet to go live on TReDS. This fund works like the CGTSME scheme and will have a lock to service SMEs who supply goods and services to unrated/small buyers. Also, allowing TReDS second window i.e., allowing SMEs to discount invoices without buyer involvement, will help to cater to SMEs whose buyers do not live on the platform,' adds Mohindru.
India Gazette
14-05-2025
- Business
- India Gazette
Alternative finance and digital lending gaining traction among MSMEs: SIDBI Survey
New Delhi [India], May 14 (ANI): Alternative finances and digital lending are gaining pace for credits to the Micro, Small and Medium Enterprise (MSME) sector, shows data from a survey by the Small Industries Development Bank of India (SIDBI). Fintechs, banks and other lending institutions are actively promoting digital awareness and building infrastructure to bring digital lending to all consumers. Though traditional forms of lending are prevalent for MSMEs, digital lending has gained significant traction in recent years. From 1 cent loans through digital means in 2017 to a staggering projected 17 per cent in the financial year 2026. 'Although digital lending is at a nascent stage, it is expected to grow faster with the government and financial institutions taking measures to increase its reach,' SIDBI said in the report. The report titled 'Understanding Indian MSME Sector: Progress and Challenges' observes that about 18 per cent of MSMEs are using digital lending platforms and 90 per cent are accepting digital payments. The survey says that maximum digital credit offtakes are happening in sectors like defence equipment, information technology and Information Technology enabled Services, general-purpose machinery, Auto components, Plastics & plastic products and Transport & logistics are the high-potential sectors for the digital credit offtake. Sectors such as Hotels, Readymade garments, Food processing, Hospitals, Drugs & pharmaceuticals, Cotton textile, Electronics goods retailers, Fabricated industrial metal products, and Grocery retailers are categorised as the moderate potential sectors. On the other hand, the least prime sectors for digital credit offtake were electrical equipment, paper & paper products, basic metals (iron and steel), Tiles & sanitaryware. The SIDBI report added that several other ways, such as the Trade Receivables Discounting System (TReDS), Capital Markets are emerging as alternative lending models for MSMEs. Globally, alternative sources of finance provide more inclusivity to borrowers and a similar trend is expected in India as well, as people move from collateral-based funding to cash flow-based funding and rely more on Digital Public Infrastructure (DPI) to assess and approve funds. The report broadly estimates that the sector still has an addressable credit gap of about 24 per cent or Rs 30 lakh crore. The gap is higher in the services sector at 27 per cent; it is estimated to be higher at 35 per cent for women-owned MSMEs, indicating a need for targeted policy actions. The report highlights that 76 per cent of the women-led MSMEs have access to credit, but they continue to face higher challenges vis-a-vis their male counterparts, with 41 per cent highlighting credit access and high competition as the largest obstacle to their growth. The SIDBI report adds that around 70 per cent of the survey respondents continue to use traditional modes of marketing, which hinders their scalability and ability to remain competitive. (ANI)
