Punjab State Industrial Development Corporation Ltd. (PSIDC)

The Visionary With a Global Outlook

	An Overview
	Objectives
	Institutional Promoter
	Joint Sector/Assisted Sector Concept & Policy
	PSIDC - as a Term Lender
	PSIDC - as an Infrastructure Developer
	PSIDC - as a Facilitator
	PSIDC - as a Single Source
	List of the Viable Engineering Projects
	Large And Medium Scale Projects Open for Financial Participation
	Contact

An Overview :

Punjab State Industrial Development Corporation Limited (PSIDC), was established in the year 1966 to promote planned industrial development in the organised sector and to speed up industrialization 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
-Promotion of industrial and infrastructure projects in 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 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. PSIDC’s present authorized share capital is Rs.800 Million. Subscribed and paid-up share capital is Rs.780 Million and share application money is Rs.53 Million.

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 companiess.

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.

(Quotes of GM/Sumitomo Corp. and MD/ Fujitsu alongwith their photographs, Ann – IV and V respectively.)

JOINT SECTOR/ASSISTED SECTOR CONCEPT AND POLICY

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 projects 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 the 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.

PSIDC – AS A TERM LENDER

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 to 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:

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 modernization, 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 5^th, 6^th and 7^th 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.

PSIDC- AS AN INFRASTRUCTURE DEVELOPER

With the advent of globalization 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 utilization.

PSIDC – AS A FACILITATOR

Today’s industrial environment entails structuring of service packages for expeditious realization of a  project in the wake of the growing globalization 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.

LIST OF THE VIABLE ENGINEERING PROJECTS

THE PUNJAB STATE INDUSTRIAL DEVELOPMENT CORPORATION LIMITED
UDYOG BHAWAN,
18, HIMALAYA MARG,
SECTOR – 17,
CHANDIGARH (India)
Telephones EPABX : 91-172-2702881-84, 2702791
Fax:91-172-704145,
Email: psidc@chd.nic.in , psidc@dot1.net.in