SME-Focused Red Fort Capital Secures Rs 22.6 Crore In Debt Funding

New Delhi, Oct 17 (KNN) Red Fort Capital, a provider of secured business loans to small and medium enterprises (SMEs), has announced a significant milestone in its financial growth.

The company has successfully raised approximately Rs 22.6 crore in debt funding, pushing its total assets beyond the Rs 100 crore mark.

This latest round of funding comprises contributions fr0m multiple sources. A public sector bank, whose identity remains undisclosed, has provided Rs 15 crore.

An additional Rs 4.1 crore has been secured through non-convertible debentures (NCDs) via foreign portfolio investors (FPI). USHA Finance has contributed the remaining Rs 3.5 crore to complete the funding round.

Parry Singh, Founder and CEO, Red Fort Capital, emphasized the importance of this achievement, noting the crucial role of public sector banks in supporting SME lending.

Singh highlighted the increasing demand for capital in India's SME sector, which he described as the country's second-largest employer.

Red Fort Capital's business model focuses on providing secured term loans ranging fr0m Rs 1 crore to Rs 10 crore, backed by real estate collateral valued at two to three times the loan amount.

The company also offers an invoice discounting facility for short-term loans between Rs 25 lakh and Rs 1 crore.

In related news, the Trade Receivables Discounting System (TReDS), an invoice discounting platform for Micro, Small and Medium Enterprises (MSMEs) enabled by the Reserve Bank of India, has reported significant growth.

During the financial year 2023-24, TReDS facilitated the financing of 41.6 lakh invoices, amounting to Rs 1.38 lakh crore.

The TReDS platform is currently operated by four RBI-licensed entities: Receivables Exchange of India Ltd (RXIL), Invoicemart, M1 Xchange, and C2FO Factoring Solutions.

Government data reveals a substantial year-on-year increase in TReDS activity, with the number of invoices financed rising by 62 percent and the total amount involved growing by 80 percent compared to the previous fiscal year.

For context, in the financial year 2022-23, the four TReDS platform operators collectively reported the financing of 25.6 lakh invoices, involving a total of Rs 76,638 crore.

This data underscores the growing importance and adoption of digital financial solutions in India's MSME sector.

(KNN Bureau)