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Case
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Reference no. 113-058-1
Subject category: Finance, Accounting and Control
Authors: D Satish (IBS Center for Management Research); Ravi Sherawat (ICFAI Business School, Hyderabad)
Published by: IBS Center for Management Research
Published in: 2013
Length: 10 pages
Data source: Generalised experience
Topics: Zero debtor; Negative working capital cycle; Liquidity; Re-distributors; Working capital; Overdraft; Current account; Leverage; Credit period; Credit limit; D&B; Credit rating
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Abstract

Testle India Ltd, a subsidiary of a global consumer packaged goods (CPG) giant Testle Inc, implemented a bold 'zero debtor policy' in 2009 with a motive to encourage cash sales and have no credit sales. This enabled the company to realise a negative working capital cycle, but it faced a challenge from the company distributors. To make life easier for the distributors, Testle India tied up with HDFC Bank, a leading private sector bank in India, to provide channel finance to its distributors. While going in for channel financing brought about the much needed liquidity for the distributors, the facility came with its own set of problems and challenges.
Location:
India
Industry:
FMCG
Size:
Very large
Other setting(s):
2013
Teaching note
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Reference no. 113-058-8
Subject category: Finance, Accounting and Control
Authors: D Satish (IBS Center for Management Research); Ravi Sherawat (ICFAI Business School, Hyderabad)
Published by: IBS Center for Management Research
Published in: 2013
Length: 8 pages
Data source: Generalised experience
View full details

About

Abstract

Testle India Ltd, a subsidiary of a global consumer packaged goods (CPG) giant Testle Inc, implemented a bold 'zero debtor policy' in 2009 with a motive to encourage cash sales and have no credit sales. This enabled the company to realise a negative working capital cycle, but it faced a challenge from the company distributors. To make life easier for the distributors, Testle India tied up with HDFC Bank, a leading private sector bank in India, to provide channel finance to its distributors. While going in for channel financing brought about the much needed liquidity for the distributors, the facility came with its own set of problems and challenges.

Settings

Location:
India
Industry:
FMCG
Size:
Very large
Other setting(s):
2013

Related

Teaching note
-
Reference no. 113-058-8
Subject category: Finance, Accounting and Control
Authors: D Satish (IBS Center for Management Research); Ravi Sherawat (ICFAI Business School, Hyderabad)
Published by: IBS Center for Management Research
Published in: 2013
Length: 8 pages
Data source: Generalised experience
View full details