When Grasim Industries embarked on its most ambitious transformation in decades, the challenge extended far beyond launching new business divisions. The company needed to ensure that thousands of suppliers across India’s industrial corridors could participate in and benefit from this evolution while maintaining the financial discipline that has characterised the group’s 76-year legacy.

With revenues exceeding US$3.7bn and each division operating independently with US$250m to US$2bn in annual revenue, the complexity of implementing a unified supply chain finance (SCF) programme was unprecedented.

The company faced five critical challenges that traditional SCF solutions could not address:

• Supplier onboarding – with over 1,000 suppliers across multiple divisions, traditional SCF programmes requiring individual supplier documentation and KYC processes were operationally impossible. Each division alone maintained relationships with hundreds of suppliers, creating a scale that would overwhelm conventional onboarding procedures.

• Division independence requirements – the treasury team needed a solution where each division could operate autonomously without visibility into other divisions’ rates, transactions, or supplier relationships, while maintaining centralised cost and credit management and oversight.

• Multi-bank coordination complexity – given the programme’s projected US$500m scale, it was decided to partner with multiple banks. Coordinating documentation and implementation across eight banks while maintaining consistent terms and operational efficiency presented significant execution challenges.

• Suppliers of different scale required different treatment – Grasim worked with micro, small and medium enterprises (MSMEs) and non-MSMEs. For MSMEs, there is a requirement to settle their dues within 45 days of receiving goods or services. Conversely, non-MSMEs typically have longer payment cycles. A solution was needed to align payable days for both vendor types.

• Complexity of suppliers – Grasim had a diverse array of suppliers, including transporters, raw material providers, IT service providers and more, each with varying payment cycles. A solution was needed to standardise these cycles, making them more homogenous to ease the IT processing and auditing tasks.

The company’s goal extended beyond operational efficiency to demonstrate that new divisions could achieve self-sustainability through disciplined working capital management. By extending payment terms from 30-60 days to 180 days through SCF, divisions could align supplier payments with customer receipts, reducing dependency on corporate cash or external funding.