Bespoke Financials outlines suitable funding solutions for FY 2026–27

India’s AYUSH sector is entering a significant phase of commercial transformation. Ayurveda, Siddha, Unani, Homoeopathy, Sowa-Rigpa, Yoga, Naturopathy, herbal products and wellness services are gaining wider domestic and international attention.

However, the industry’s growth is also creating substantial working-capital pressure. Manufacturers, traders, exporters, wellness brands and service providers are required to invest in raw materials, testing, certification, packaging, inventory, technology, skilled manpower and distribution well before the related revenue is realised.

The challenge is particularly important for companies moving from regional operations towards national distribution, private-label manufacturing, digital commerce and international exports.

Recent export figures indicate the sector’s growing international relevance. Exports of AYUSH and herbal products increased from USD 649.2 million in FY 2023–24 to USD 688.89 million in FY 2024–25, representing growth of 6.11 per cent, according to the Ministry of Commerce and Industry. Government data

This growth is encouraging, but it also raises expectations regarding product quality, documentation, traceability, regulatory compliance and supply reliability.

Working-capital challenges during FY 2023–24

During FY 2023–24, many AYUSH-related businesses continued to manage the after-effects of demand fluctuations, inventory adjustments and changing consumer preferences.

Manufacturers faced pressure from the cost of medicinal plants, herbs, oils, extracts, packaging materials and laboratory inputs. Seasonal procurement was another challenge. Companies often needed to purchase herbs and medicinal plants during limited availability periods, requiring sizeable cash outflows before production or sales could begin.

Distributor receivables also created liquidity gaps. Several businesses supplied products on credit to distributors, pharmacies, institutional buyers and wellness centres. When collections were delayed, companies faced difficulty replenishing inventory, paying suppliers and accepting new orders.

At the same time, companies seeking export growth had to spend on product testing, documentation, packaging, freight, insurance and registration-related requirements before receiving overseas payments. Smaller businesses with limited collateral found it difficult to obtain suitable structured finance from conventional channels.

Working-capital challenges during FY 2024–25

FY 2024–25 brought stronger growth opportunities but also increased operating requirements.

The expansion of herbal, personal-care, wellness and direct-to-consumer categories encouraged businesses to develop new products, increase production capacity and hold larger inventories. Private-label and contract manufacturing opportunities also increased the need for raw-material procurement, packaging stock and production scheduling.

Companies investing in quality systems faced additional expenditure on:

Laboratory testing and batch analysis
Stability and microbial studies
Traceable sourcing
Manufacturing upgrades
Quality-control personnel
Certification and audit requirements
Export documentation and product registration

These investments are strategically important, but they can place pressure on cash flow because the expenditure generally occurs before premium pricing, new market access or export revenue is achieved.

Exporters also faced longer cash-conversion cycles. A company might procure inputs, complete production, conduct testing, dispatch goods and then wait several weeks or months for overseas payment. Foreign-exchange movements, freight costs and changing buyer negotiations could further affect margins.

Working-capital challenges during FY 2025–26

FY 2025–26 was marked by a stronger shift towards quality-led and internationally acceptable AYUSH operations.

The Ayush Quality Mark was launched in December 2025 to strengthen quality assurance and global recognition of AYUSH products and services. Its implementation has been entrusted to AYUSHEXCIL, and the framework covers AYUSH products, hospitals, clinics, wellness centres, medical-value-travel facilitators and product-testing laboratories. Ministry of Ayush update

For businesses, this transition created both opportunity and financial pressure. Companies preparing for larger domestic or international markets needed to invest in documentation, testing, packaging, manufacturing systems and professional quality management.

The Ministry of Ayush has also reported that the Ayush Oushadhi Gunvatta Evam Utpadan Samvardhan Yojana has a five-year budget outlay of ₹122 crore. Under the scheme, 18 AYUSH pharmacies and seven drug-testing laboratories had received financial support, with ₹40.13 crore sanctioned for such upgrades. Government update

During FY 2025–26, companies also faced pressure from:

Higher raw-material and packaging costs
Delayed distributor and institutional receivables
Increased testing and certification expenditure
Freight, insurance and logistics uncertainty
Marketplace settlement delays
Inventory buildup for seasonal demand
Export documentation and regulatory costs
Sudden bulk-order requirements
Customer and distributor concentration
Investment in production and quality infrastructure

The sector therefore experienced a growing mismatch between business opportunity and immediately available liquidity.

Why profitability does not always mean liquidity

An AYUSH business may report revenue and profit but still face a cash shortage.

Funds may remain blocked in:

Seasonal herbs and medicinal plants
Work-in-progress batches
Finished goods awaiting dispatch
Receivables from distributors and institutions
Export shipments in transit
Testing and certification expenditure
Packaging and inventory prepared for new channels

This is why working capital must be evaluated according to the operating cycle rather than only through annual turnover or reported profitability.

A manufacturer supplying an established distributor may require receivable-backed finance. A medicinal-plant trader may require seasonal procurement finance. An exporter may need pre-shipment and post-shipment funding. A digital wellness brand may require short-term liquidity against marketplace and customer settlements.

A uniform lending structure may not be suitable for all these business models.

Suitable working-capital facilities for FY 2026–27

Bespoke Financials evaluates funding requirements according to business vintage, financial performance, order book, customer quality, procurement cycle, receivable ageing, collateral position, compliance readiness and expansion plans.

Suitable facilities for eligible AYUSH-related businesses may include the following.

Non-Asset-Based Working Capital

Working Capital facilities of up to ₹20 crore may be considered for eligible manufacturers, traders and exporters requiring liquidity for procurement, production, inventory, receivables and regular operations.

This can be relevant for businesses with sound transaction flows but limited availability of conventional collateral.

Supply Chain Finance

Supply Chain Finance of up to ₹50 crore, where suitable, may support supplier payments, buyer-linked transactions and structured trade flows.

This facility can help AYUSH manufacturers manage vendor payments and fulfil confirmed buyer requirements without placing the entire burden on internal cash reserves.

Export and Import Finance

Export and Import Finance of up to USD 5 million may be considered for eligible companies managing international trade cycles.

The facility can support:

Pre-shipment procurement
Production and processing
Testing and packaging
Freight and documentation
Import of machinery or specialised inputs
Post-shipment receivables
Overseas buyer credit periods

Export finance is especially relevant for herbal-product companies, private-label manufacturers and AYUSH businesses entering new international markets.

Agri Trade Finance

Agri Trade Finance may assist businesses trading medicinal plants, herbs, agricultural inputs and processed botanical materials.

It can help companies purchase seasonal inventory at the appropriate time, manage supplier payments and hold stock until sales or processing cycles are completed.

Bank-Guarantee-Backed Procurement Facility

A Procurement Facility backed by a suitable bank guarantee, with tenor up to 270 days, may help eligible companies negotiate extended payment periods with suppliers.

This can be useful for manufacturers purchasing bulk herbs, extracts, oils, packaging materials or other production inputs.

Emerging Corporate Finance

Emerging Corporate Finance of up to ₹15 crore may be relevant for growing AYUSH companies with established operations, improving financial performance and a requirement for structured expansion capital.

The facility may support capacity enhancement, distribution expansion, product development or professionalisation of business systems.

Merchant Cash Advance

Merchant Cash Advance solutions may be evaluated for eligible digital-first wellness brands, e-commerce businesses and retail-focused companies whose cash flows are linked to customer transactions and marketplace settlements.

This may help bridge short-term gaps caused by advertising expenditure, fulfilment costs, inventory buildup and delayed platform settlements.

Working Capital Against Negotiable Instruments

Eligible companies may consider working capital against negotiable instruments up to ₹20 crore for short periods of up to ten months, subject to instrument quality and transaction suitability.

This structure can provide liquidity where receivable instruments and underlying business transactions support the funding requirement.

Equity-Based Working Capital

For larger growth requirements of ₹25 crore and above, Equity-Based Working Capital may be evaluated where the company is undertaking significant expansion, market entry, technology investment or capacity enhancement.

This may be more suitable for businesses with a strong growth plan requiring substantial capital beyond conventional short-term borrowing.

Asset Restructuring with Additional Working Capital

Eligible companies with existing financial obligations may explore asset restructuring with additional working capital facilities from ₹10 crore and above.

This may help reorganise existing liabilities while creating liquidity for procurement, production continuity, business expansion and operational stability.

How AYUSH companies can improve funding readiness

Companies seeking funding during FY 2026–27 should prepare a clear finance package covering:

Latest audited financial statements
GST and income-tax records
Banking statements
Customer and supplier ageing
Stock and inventory details
Existing borrowing schedule
Licences and regulatory approvals
Quality certificates and testing records
Export orders and buyer details
Projected cash flows
Details of end use of funds
Procurement and production cycles
Receivable-realisation assumptions

Funding proposals should be linked to specific business requirements rather than presented as general borrowing requests.

For example, a proposal may be structured around seasonal medicinal-plant procurement, a confirmed export order, distributor receivables, a packaging expansion, private-label production or a laboratory-upgradation programme.

This improves transparency and allows the financier to evaluate the facility against identifiable business cash flows.

Bespoke Financials: Supporting quality-led AYUSH growth

Bespoke Financials positions itself as a trusted financial partner for entrepreneurs, MSMEs, SMEs, manufacturers, traders, exporters and emerging corporates.

Trusted since 2016, the company states that it has served more than 4,500 businesses across India and focuses on faster, flexible and customised financial solutions aligned with actual business requirements. Its offerings include non-asset-based working capital, supply-chain finance, export and import finance, agri trade finance, procurement facilities, emerging corporate finance, equity-based working capital and asset restructuring.

For AYUSH-related companies, the central objective is to align liquidity with the full operating cycle—from medicinal-plant procurement and manufacturing to testing, inventory, distribution, exports and collections.

Conclusion

India’s AYUSH industry is moving from a heritage-led market towards a more organised, quality-driven and globally connected business ecosystem.

The opportunities are substantial, but growth will require more than demand. Companies must finance standardisation, testing, certification, raw-material procurement, inventory, production, distribution and export readiness.

The working-capital challenges faced during FY 2023–24, FY 2024–25 and FY 2025–26 demonstrate that liquidity must be planned before the next order, seasonal procurement cycle or market-expansion opportunity arrives.

In FY 2026–27, AYUSH businesses that combine traditional credibility with quality systems, regulatory preparedness and disciplined financial planning will be better placed to achieve sustainable growth.

Bespoke Financials can help eligible AYUSH manufacturers, traders, exporters, wellness companies and medicinal-plant businesses evaluate funding structures aligned with their operating cycles and expansion objectives.