RXIL, the Receivables Exchange of India Ltd, which is a prominent platform for invoice discounting for MSMEs, has set a target of achieving a business throughput of ₹40,000 crore in the fiscal year 2023-24, according to its Managing Director & CEO, Ketan Gaikwad. In the previous fiscal year, the Trade Receivables e-Discounting System (TReDS) platform witnessed a significant increase in business throughput, reaching ₹25,086 crore, an 86% surge compared to the ₹13,500 crore recorded in the fiscal year 2021-22.
Gaikwad attributed this substantial growth to the addition of 400 corporate entities and the government’s continuous efforts to onboard more corporations. He mentioned that the inclusion of insurance as an eligible activity on the platform will further boost business volumes. Lenders and financiers, backed by insurance, will be more willing to assume the risk associated with lower-rated corporates.
Gaikwad expressed that corporates have become increasingly aware of the advantages offered by the TReDS platform, leading to a rise in its popularity. He anticipates that more corporations will join the platform in the current fiscal year. The platform provides value in terms of price discovery and aims to expand its availability to more MSMEs.
TReDS serves as an electronic platform that facilitates the financing and discounting of trade receivables for micro, small, and medium enterprises through various financiers. These receivables can be owed by corporates, government departments, public sector enterprises, and other buyers. One significant advantage of TReDS is that it does not require MSMEs to provide collateral, and they are not held liable in case of defaults. Notably, the first transaction on the TReDS platform in India occurred on January 9, 2017, and was conducted through RXIL.
According to Gaikwad, RXIL is currently collaborating with the Government e-Marketplace (GeM), the government’s public procurement portal. They are engaged in the process of integration with the GeM platform. Gaikwad stated that payments for goods procured through GeM will be facilitated through TREDS. He further emphasized that their platform can serve as one of the payment mechanisms for GeM.
RXIL in black
In a significant milestone, RXIL, established in 2016, achieved profitability for the first time in the fiscal year 2022-23, recording a profit of ₹7 crore. Ketan Gaikwad expressed his confidence in RXIL’s ability to sustain profitability in the current fiscal year as well. The company has set its sights on eliminating its accumulated losses of ₹27 crore by the year 2025-26.
RXIL, one of the three TReDS platforms operating in India, stands out as the sole platform actively engaged with State Governments. Presently, RXIL has established partnerships with the Governments of Goa and Tamil Nadu. Additionally, discussions are underway between RXIL and seven to eight other State Governments, according to Gaikwad.
Gaikwad expressed his optimism about the increasing business volume facilitated by the Tamil Nadu Government in the upcoming quarters. He stated that a mutual agreement was reached with the Tamil Nadu Government in August of the previous year. Subsequently, the TN government has displayed acceptance and MSMEs are gradually reaping the benefits. Gaikwad estimated that around ₹200-250 crore worth of business transactions have taken place, with the expectation of even higher figures.
Elaborating on the functioning of the mechanism with the Tamil Nadu Government, Gaikwad explained that RXIL has played a crucial role in establishing a pre-TReDS platform where suppliers’ invoices are uploaded. These invoices are then processed through the TReDS platform for discounting purposes.