TReDS platform M1xchange eyes IPO in 3-5 years, aims ₹1.25 trn biz in FY25

M1xchange, 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.

M1xchange, 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.