Industrial Infrastructure
Facilities - State Government Bodies
Punjab - State Industrial Development
Corporation
Punjab State Industrial Development
Corporation (PSIDC), was established in the year 1966
to promote planned industrial development in the organised
sector and to speed up industrialisation in the
state of Punjab. Today, PSIDC'S name is synonymous in
the corporate world and it is engaged in the promotion
of large and medium scale projects. PSIDC is responsible
for making major projects happen in the new economic
environment.
Broad Objectives
PSIDC since inception has attained phenomenal growth
in the industrial sector in the state and is today reckoned
as one of the foremost State Industrial Development
Corporations in India. The objectives of PSIDC are :
Promotion of industrial and infrastructure projects
in the Assisted and Joint Sector.
Extending of term loan assistance under IDBI Refinance
Scheme to projects promoted by private sector.
Providing of escort services to projects initiated
through private sector.
PSIDC's present authorised share capital is Rs. 800 Million.
Subscribed and paid-up share capital is Rs.780 Million
and share application money is Rs. 53 Million.
It is a professionally managed public sector undertaking
of the Government of Punjab with Managing Director looking
after the day-to-day affairs under overall administrative
control of the Board Directors headed by Sh. Vinod Kapoor
(Chairman). Mr. S. S. Brar and Mrs. Kalpana Mittal Baruah
of Indian Administrative Services having vast and rich
experience in different disciplines are the present
Managing Director and Additional Managing Director respectively.
With the advent of globalisation and
India ushering into an era of development and also the
Government of India declaring infrastructure as a high
priority sector, PSIDC has recently embarked upon infrastructure
development activities primarily related to industry,
with emphasis on the development of integrated industrial
parks, telecommunications, surface transport and power
generation mainly for captive utilisation.
PSIDC As An Institutional
Promoter
It was during 70s that PSIDC emerged as a prime industrial
catalyst by establishing large and medium scale Industrial
projects. The 80s witnessed further upsurge of development
activities and accomplishment of large industrial ventures
involving sophisticated technological collaborations
with world renowned corporates.
In the 90s, PSIDC further accelerated the pace of industrial
growth by inviting international and Indian companies
of stature for promotion of a wide spectrum of industries.
As an institutional promoter, so far 246 projects promoted
by PSIDC in varied field of industry viz Electronics
and Telecommunications, Chemicals, Pharmaceuticals, Textiles, Agro-based, Light Engineering and Automobiles,
have commenced commercial production involving aggregate
capital outlay of Rs. 27490 million, offering direct
employment to over 50,000 people. Another 31 projects
with capital outlay of Rs.8440 million are nearing completion.
During 1996-97, PSIDC contributed Rs.128.78 million
as equity in different promoted companies.
PSIDC has under its umbrella, companies like Punjab
Tractors, Punwire, Punjab Alkalies and Chemicals, JCT
Electronics, Malwa Cotton Spinning Mills, Max-GB, ESPL,
Punjab Chemicals and Pharmaceuticals, Wool Combers, Swaraj Engines, Stepan Chemicals, Winsome Yarns, Arihant
Cotsyn, Alpha Drugs, S R Industries and companies belonging
to Nahar, Trident, Vardhman and Steel Strip Groups.
Foreign companies having association with PSIDC include
Ericsson, Sweden; Hitachi, Japan; Mazda Corp., Japan;
Mitsubishi, Japan; Oki, Japan; Phillips, Holland; Westinghouse,
Electric Corp., U.S.A; Udhe Germany; Kenwood, Japan;
Kamatsu, Japan; Nodia-Springs Israel; General Electric,
USA ; Harris Corp., USA; Relm Communication, USA; and
Saudi Aramco, Saudi Arabia.
PSIDC as a policy prefers facilitating establishment
of ventures in Assisted Sector restricting its equity
participation to the extent of fifteen percent(15%)
of the equity share capital wherein the private promoter
is required to bring in balance equity share capital
through own resources and/or public subscription. In
Joint Sector, PSIDC and the private promoters contribute
in the equity share capital, in the ratio of 26:25 and
balance 49% is mustered through public issue. However,
in the event of no public issue envisaged, PSIDC restricts
its contribution to the extent of 15% and 26% of the
equity share capital as appraised by the financial Institution(s).
Under the scheme, after evaluating the projects and
the financial capabilities of promoters, PSIDC initially
enters into a Memorandum of Understanding and the Financial
Collaboration Agreement is signed only after the project
has been appraised by the financial institutions and
term loan assistance sanctioned thereof, as also approval
accorded by the State Project Approval Board.
PSIDC contributes in the equity share capital of the
company incorporated for the purpose only after the
project has been appraised and financed by the financial
institutions and/or banks. Till then, all the expenditure
is incurred by the private promoters in terms of the
recommendations of the management committee constituted
to monitor the project comprising of equal nominees
of the private promoters and PSIDC. Expenses incurred
are, however, considered as part of the project cost
at the time of appraisal by the financial institutions.
Promoters of the company are also required to enter
into a buy-back agreement with PSIDC, inter alia,
stipulating that they shall purchase and/or arrange
to purchase equity shares subscribed by PSIDC in the
company on expiry of the third, fourth and fifth year
from the date of commercial production by the company
at a price equivalent to par value plus interest at
the rate applicable to term loans and to be calculated
from the date of payment for shares less dividend, if
any, received by PSIDC in respect of the said shares
in the intervening period or the highest market value
published by the Indian Stock Exchange(s) where the
shares may be listed, on the date of option, whichever
is higher.
In 1976, PSIDC was designated as the "Second State
Level Financial Institution" by the Industrial Development
Bank of India(IDBI) under its Refinance Scheme. Till
date, PSIDC has extended term loans aggregating Rs.3780
million to over 350 companies. In 1996-97, PSIDC sanctioned
term loans and bridge loans to the extent of Rs.871
million and disbursed loans aggregating Rs.800 million
PSIDC, extends financial assistance under the aegis
of IDBI and provides term loan upto Rs.25 million under
Refinance Scheme to small and medium scale ventures
for new and expansion of projects having capital outlay
upto Rs.100 million. A company can avail term loan upto
Rs.25 million for each of its projects. PSIDC provides
term loan assistance independently as well as along
with other Financial Institutions and/or Banks.
Generally the following norms are considered for financing
projects under this scheme:
Debt equity - 1:1
Minimum promoter's contribution - 30% of the cost of
the project.
Average Debt Services Coverage Ratio(DSCR) - not lower
than 1.5.
PSIDC also extends term loan upto Rs.50 million on
a fast track under Equipment Refinance Scheme(ERS) of
the Industrial Development Bank of India to the existing
companies having good past record of performance and
sound financial position. Assistance under this Scheme
is available for installation of identifiable items
of plant and machinery and other equipment for modernisation,
expansion, balancing, replacement or any other purpose
related to improvement in the performance of the activities
of the company except for new projects.
PSIDC, offers facility of direct subscription for projects
promoted by private sector so as to meet a gap, if any,
in the promoter's contribution under its Direct Subscription
Scheme to the extent of 15% of the equity capital of
the company.
Under the scheme, the promoters of the company are
required to enter into a buy-back agreement with PSIDC,
inter-alia stipulating that they shall purchase and/or
arrange to purchase equity shares subscribed by PSIDC
in the company in the 5th, 6th and 7th year of commercial
production, at a price equivalent to par value plus
interest at the rate applicable to term loans and to
be calculated from the date of payment for shares less
dividend, if any, received by PSIDC in respect of the
said shares in the intervening period or the highest
market value published by the Indian Stock Exchange(s)
where the shares may be listed, on the date of option,
whichever is higher.
Today's industrial environment entails structuring
of service packages for expeditious realisation of a
project in the wake of the growing globalisation and
threats from International Competitors. PSIDC is alive
to these concerns and is providing "Escort Service"
especially for promotion of industrial ventures in Punjab
and has been instrumental in facilitating projects of
Godrej-GE(White Goods), Century textiles(Pulp and Paper),
Gujarat Ambuja (Cement), IC(Paints) and HPCL - Saudi
Aramco(Mega project for Grass Root Refinery).
PSIDC- As
a Single Source
PSIDC provides a host of services to entrepreneurs/companies,
right from inception of projects to their smooth implementation,
which includes extending cooperation in obtaining all
approvals from the State and Central Governments. Thus,
PSIDC virtually acts as a single source for entrepreneurs/companies
for successfully implementing their projects in the
State of Punjab.
Contact :
The Punjab State Industrial Development Corporation
Ltd.
Udyog Bhawan,
18, Himalaya Marg,
Sector - 17,
Chandigarh (India)
Tel : 91-172-702881-84, 702791
Fax :91-172-704145,
Email:psidc@chd.nic.in/psidc@dot1.net.in
