Concept Note on SITP

Presented by
Generation Next Pvt Ltd
 Textile Industry experiencing high growth
CAGR Cloth production CAGR
Yarn production billion sq. mtrs 4.1%
million tonnes 3.6% 45.0
3.4 8.9%
3.1 10% 6.0% 38.6

2.4 8% 31.5 41%

100% non 17% 3.8% 100% non
cotton yarn 20% 36%
8% cotton cloth 27%
Blended yarn 17% 15% 13%
Blended cloth 13% 4.6%

Cotton yarn 75% 72% 73% Cotton cloth 60% 49% 46% 0.9%
3.2%

2005 2010 2015 2005 2010 2015

 Increased output of yarn and fabric - CAGR of 3.6% and 4.1% respectively; global market
has grown at a CAGR of 2-2.5% in this period
 Highest growth seen in 100% non cotton yarn and fabric, followed by blended yarn and fabric
 Cotton cloth continues to dominate the industry
 Potential Growth of Exports & Domestic Market
Market size estimates  Drivers of exports
USD bn  Rising outsourcing budgets of retail giants
 Indian companies evolving from mere
65 converters to vendor partners of global buyers
 Large outsourcing orders helping Indian
companies build capacities, lower their per
30
unit cost and become more competitive
37  Imposition of caps on certain import segments
Exports from China by EU and US given the surge in
12 Chinese exports has opened up opportunities
for India
Domestic
25 35
market  Drivers of domestic market
 Growing young population
2010 2015*  Rising household income levels
 Growth of organised retail
Problems of Textile Industry
 Indian Textile Industry is highly Fragmented Industry.
 Lack of World Class & State of Art Infrastructure like
1.Roads & Transportation.
2.Drainage System.
3.Power Supply.
4.Inadequate Water.
5.Effluent Treatment Plant.
 Lack of Modern Technology.
 Lack of New Product Development & Diversification.
 Lack of Proper Marketing Setup.
Policy Initiative
 Object of Scheme:
 To Provide the Industry World Class & State-of- Art Infrastructure
facilities.
 To meet International Environment & Social Standard.
 To create new textile park of International Standards at potential
growth centre.
 30 Parks have been approved in XIth five year plan.
 XIIth five year plan Target – 50 Parks
 24 Sanctioned & Lot of 20 is coming in next 6 months.
Concept of SITP
 Textile Park Under SITP is a Park by Textile Units
for themselves.
 Textile Units contributes to the corpus of the SPV.
 Funds from MOT is also part of the Corpus.
 Textile Units through SPV develops Infrastructure
& Factory Building for their Textile Units in the
Park.
 The park will be maintained by the SPV.
Infrastructure Components of an ITP
 Compound Wall & Entrance Gate
 Road Network
 Storm Water Drainage System
 Water Storage & Supply System
 Power Substation & Distribution Network
 Sewerage System
 Common Effluent Treatment Plant.
 Fire Fighting Network
 Solid Waste Management System
 Landscaping
 Telecommunication & Internet
CFC Components of an ITP
 Testing Laboratory
 Design Centre
 Training Centre
 Trade Centre/Display Centre
 Warehouse
 Food Court or Canteen
 Workers hostel
 Exhibition hall
 Administrative Building
 Club House
 Common Toilet
Component of Project Cost & Options
 Group A - Land
 Group B - Common Infrastructure
 Group C - Building for Common facilities
 Group D - Factory Building for production purpose.
 Group E- Plant & machinery.
 Group F - Work space for textile units and workers hostel
There are two option for the PC for seeking financial assistance from GOI
Option-1
Project Cost = Total of Group B,C,D&F (Provided ownership of the
factory building vests with the SPV.
Option-2
Project Cost = Total of Group B,C&F (If factory Building is Individually
owned.)
Subsidy under SITP
1. Amount of Subsidy:
 40 Crore or 40% of Project Cost whichever is lower.
2. Disbursement:

SN Particulars % of Subsidy
1 1st Installment 10%
2 2nd Installment 20%
3 3rd Installment 30%
4 4th Installment 30%
5 5th Installment 10%
Total 100%
Condition for Disbursement of Subsidy
 Conditions for 1st Installment (10%):
1. Establishment of SPV.

2. Inclusion of representative of GOI & PMC on the BOD.

3. Land to be in the Possession of SPV.

4. Issuance of share holders’ agreement.

5. DPR duly validated by PMC & approved by PAC.

 Conditions for 2nd Installment (20%):
1. Utilization Certificate for the 1st Installment.

2. Details of equity contribution.

3. Sanction letter for loan component (In case of SPV takes loan)

4. Award of contracts worth at least equivalent to 30% of the total

project cost excluding the land cost
Condition for Disbursement
 Condition for 3rd Installment (30%):
1. Utilization Certificate of 2nd Installment.
2. Expenditure of 1.5 times of the GOI grant by the SPV.
 Condition for 4th Installment (30%):
1. Utilization Certificate of 3rd Installment
2. Expenditure of 1.5 times of the GOI grant by the SPV.
 Conditions for 5th Installment (10%):
1. UC of Fourth Installment.
2. Production by 25% of the units.
3. Successful completion of the Park.
Flow of Execution of the Project
1. Study of the Project.
2. DPR Preparation & Submission.
3. Presentation of DPR before PAC.
4. Approval & Sanction.
5. SPV Financial Closure.
6. Detailed Engineering & Survey.
7. Tendering & Bidding.
8. Selection of Contractor & Award of contract
9. Members Financial Closure.
10. Members to Install the Machinery & start production
11. Maintenance & Operation by the SPV.
Role of PMC
 Preparation of Project Plan including setting of standards
for Infrastructure.
 Structure & appraise the Project and submit the same for
consideration of PAC.
 Assist the SPV in the selection of agencies in the
preparation of bid documents, construction, operation &
maintenance of the facilities in the project.
 Assist the SPV in achieving the financial closure.
 Monitor the timely Implementation of project & submit
periodical progressive report to the MOT.
 Ensure timely completion of project as fixed by PAC.
Role of SPV
 Conceptualize, formulate, achieve financial
closure, implement & manage the infrastructure.
 Procure Land.
 Allocate land to members.
 Maintain the Infrastructure.
 Appoint Contractor & Consultant.
 Assist members in achieving financial closure.
Role of State Govt.
 Providing all the requisite clearances, wherever needed and
assistance for Power, Water and other utilities.
 Assist in identification and procurement of suitable land.
 The State Government agencies like Infrastructure/Industry
Development Corporations may also participate in the projects by
way of subscribing to the equity of SPV or by providing grants
 Providing flexible and conducive labour environment and
Consider special facilities like exemption of stamp duty etc. for
the units located in the ITP.
 Dovetailing of other related schemes for overall effectiveness and
efficiency of the project.
 In order to facilitate proper coordination, State Governments
would be requested to participate in the SPV.
Area Allocation of ITP
Area Area
SN Particulars %
Sq.Mt Sq ft
1 Total Area 100% 294126 3164796
2 Open Space 15% 48400 520784
3 Road Area 10% 33428 359685
4 Infrastructure Area 5% 10108 108762
5 Common Facilities Ara5% 14690 158064
6 Saleable Area 65% 187500 2017500
Project Cost
Amount Amount
Sn Description
(Rs. in Lacs) (Rs. in Lacs) %
1 Land Cost 3529.51 3529.51 16.91%
2 Common Infrastructure 2779.19 13.31%
2.1 Compound Wall & Gate 109.37
2.2 Roads 240.42
2.3 Strom Water Drain & Footpath 540.56
2.4 Over Head Tank And Under Ground Tank 40.00
2.5 Water Distribution Network 30.79
2.6 Power Sub Station 438.60
2.7 Overhead Electric Line upto the units 34.57
2.8 Street Lighting Network 21.25
2.9 Sewarege Pipeline & Manhole 15.39
2.10 Effluent Treatment Plant 845.00
2.11 Bus, Rickshaw, Scooter and Cycle Stand 61.30
2.12 Land Scapping 260.39
2.13 Solid Waste Manegement 115.00
2.14 Fire fighting Network 11.54
2.15 Water Harvesting 15.01

Continued..
Project Cost
Amount Amount
Sn Description
(Rs. in Lacs) (Rs. in Lacs) %
3 Common Facilities: 1058.16 5.07%
3.1 Administration Building 33.50
3.2 Bank & ATM 14.41
3.3 Multipurpose Hall 288.13
3.4 Polyclinic/Medical Store 7.20
3.5 Canteen 90.04
3.6 Recruitment & Training Center 72.03
3.7 Industrial Goods Shopping Center 54.02
3.8 Design & R & D Centre 36.02
Mechanical Workshop with Repairs &
3.9 174.68
Maintainance Shop
3.10 Workers Hostel & Creche 288.13
4 Factory Building : 13506.15 13506.15 64.71%
5 Project Cost Eligible for SITP 20873.01 20873.01 100.00%
6 Cost of Designing , Supervision & Consulting Fees 330.42 330.42
7 Total Project Cost 21203.43 21203.43
 Projected P&L Statement
SN Description Unit Details
A Profitability
1 Saleable Area Sqft 2017500.00
2 Sale Rate/sqft Rs 1500.00
3 Sale Value in Crore Crore 302.63
4 Less: Project Cost as per DPR Crore 212.03
5 Profit from Sale of Construction Crore 90.59
6 Profit in Construction 40% of PC Crore 84.81
7 Total Profit Crore 175.40
8 Profti per Acre in cr Crore 2.41
9 Common Facilities Area Sq ft 158064.40
10Rate of Rent p.m. /sqf Rs 15.00
11Rent Income from CFC in Cr p.a. Crore 2.85
B One Time Profit in Cr
Profit from Sale of Construction Crore 90.59
Profit in Construction 40% of PC Crore 84.81
Total One time Profit Crore 175.40
C Recurring Profit in Cr p.a.
Rent Income from CFC in Cr p.a. Crore 2.85
 Project Structure
SPV

Generation Next

PMC for Subsidy PMC for PMC for Designing Funding Agencies
Liaisoning & Approvals
Thank You
Nuruddin Shaikh(CEO)
Generation Next Consultancy
Services
Off: 4, Ayesha Nagar, Near Taj Appt.,
Chalisgaon road, Dhule-424001 (MS)
T: 02562 240305
M: 9970703160
Email: nuruddin.generation@gmail.com