Driving Financial Agility in Petrochemical Supply Chains Through TReDS

By Vibha
Posted On August 5, 2025

Industry Overview

India’s petrochemical industry, valued at approximately $220 billion, supports over 5 million jobs and contributes 6 percent to GDP, driving economic growth. The sector is set to transform, but challenges remain in the landscape. The global industry is navigating with decreasing margins and unpredictable prices. Additionally, the domestic market also faces increased pressure from low-cost imports and slow receivables, leading to rising operational costs. In this landscape, inconsistent cash flow and extended payment cycles often disrupt operations, preventing timely investment in innovation and competitiveness.

TReDS as the First Step in Strengthening Cash Flow

TReDS is a digital platform introduced by the Reserve Bank of India in 2014 to facilitate the financing of trade receivables. TReDS platforms enable MSMEs, NBFCs, and enterprises to digitally finance receivables by speeding up liquidity and eliminating borrowing costs. It ensures full transparency, faster processing, and reduced friction, making it easier for businesses to digitise and scale their supply chain finance operations.

KredX DTX: Enhancing Liquidity Across Supply Chains

A Domestic Trade Exchange (DTX) is an RBI-licensed digital TReDS platform that enables MSMEs, NBFCs, and enterprises to trade receivables, process invoices, and access financing options seamlessly. The digital platform offers an innovative, smarter framework to overcome the industrial finance issues affecting the workflow operations.

Stronger Vendor Relationships

Early payments improve supplier satisfaction and retention, reducing friction and bolstering supply chain resilience.

Regulatory Compliance

DTX ensures 100% adherence to the 45-day payment rule under the recent norms without straining cash flow

Diverse Supplier Aid

Alongside MSMEs, DTX by KredX supports invoices from mid-market suppliers, service providers, including small-scale corporates that cater to the diverse needs of petrochemical supply chains.

Instant, Collateral-Free Access

Financing under DTX depends on the financier’s credit profile, not the supplier’s, which provides seamless,quick working capital access to more suppliers within 24 hours.

Competitive Financing Rates

DTX platforms invite multiple financiers to bid, creating competitive interest rates and saving MSMEs money on each transaction.

Extended Payable Timeline

Enterprises retain their internal cash reserves while still ensuring suppliers are paid on time.

Why Petrochemical Firms Should Adopt TReDS

TReDS resolves the financing of trade receivables by interconnecting MSMEs (suppliers) with financiers and large corporate buyers. Digital TReDS platforms like KredX’s DTX are revolutionising supply chains by ensuring seamless working capital management and regulating efficient operations. 

  • Seamless Liquidity: Accessing seamless liquidity aggravates pressure on mill operations, inventory procurement, and energy costs.
  • Dynamic investment: Enabling quick reinvestment into digital upgrades, environmental compliance, or capacity expansion that is crucial amidst marginal pressure.
  • Strengthening Relationships: Timely payments help suppliers innovate, uphold standards, and collaborate more effectively.
  • Scale Global Expansion: DTX empowers firms to overcome global challenges, including increasing supply, unpredictable market, and evolving demand, with stronger financial controls.

Real Impact: Use Case

In the highly competitive landscape, a polyester manufacturing company faced delayed working capital challenges. Despite a growing order book worth ₹4 crores, liquidity constraints from delayed payments and traditional loans hindered growth in the sector. 

Key Issues:

  • 75-day cash conversion cycle
  • Long approval timelines
  • 35% order rejection rate due to capital constraints
  • Collateral requirements and high interest rates from traditional lenders.

Accelerating Liquidity with KredX DTX

By adopting KredX DTX, an RBI-regulated TReDS platform, the company transitioned from prolonged processing delays to instant working capital access within 24 hours, without pledging assets. The competitive bidding system helped lower borrowing costs and buyer settled payments on time to the financier, ensuring zero operational friction.

How It Worked:

  • The polyester manufacturer uploaded the invoice, and the buyer verified on Monday.
  • Multiple financiers then submitted competitive bids throughout the platform.
  • After which, the manufacturer selected the best offer, and funds were disbursed within 24 hours by Tuesday morning, without any collateral or financial stress.
  • The buyer, then repaid the financier on the due date, without any hassle or recourse.

The KredX DTX Transformation

After onboarding with DTX by KredX, the company saw measurable results:

  • 82% increase in production capacity
  • 95% drop in order rejection because of payment delays.
  • 100% reduction in working capital requirement
Final Thoughts

The petrochemical industry is navigating a period of low-cost imports, thin margins, and global uncertainty in the working capital challenges. The above context indicates that TReDS is a strategic, modern platform to cope with the volatile financial challenges in the sector. It helps petrochemical firms and their suppliers stabilise liquidity and support growth investments, which implies the growing role of fintech in building resilient supply chains.

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