The Himachal Pradesh State Industrial Development Corporation (HPSIDC) is the major agency for promotion and establishment of industrial units in Himachal Pradesh. It is also the major State level Financial Institution and provides long term loans for industrial projects. The important activities of the Corporation are:-
HPSIDC operates many schemes for providing long term loans for the setting up of industrial units in the state. The salient features of the various schemes are :
Long-Term Loans :
The Corporation provides long-term loans to the extent of Rs.150 lakhs to an industrial project (including tourist related ventures) for the acquisition of fixed assets like land, building, plant and machinery and to meet expenditure on technical know-how pre-operatives etc. Such long term lending is normally operational under the Refinance/Credit Scheme of the Industrial Development Bank of India (IDBI) or the Small Industries Development Bank of India (SIDBI). Long term loans are provided to public/private limited companies, partnership firms, Hindu joint family concerns, sole proprietary concerns and cooperative societies. The loans are sanctioned for setting up a new industrial unit as well as for the expansion, diversification and modernisation of an existing unit. Generally, projects having a total project cost not exceeding Rs.10.00 crore are financed under the scheme. The debt equity ratio normally does not exceed 1:1. The Corporation also requires collateral security usually in the form of real estate to the extent of 25% of the term loan required.
Projects can also be considered for consortium financing by HPSIDC alongwith either the Himachal Pradesh Financial Corporation (HPFC) or any other financial institution/bank.
The term loans extended by the Corporation are repayable within a period of 7-10 years with a moratorium of 1-2 years depending upon the servicing capacity of the project. The interest rates charged are those prevailing from time to time.
Equipment Finance :
Under this scheme, quick financial assistance is available to existing small and medium industrial units which are otherwise eligible for financial assistance from HPSIDC and have good record of past performance and enjoy sound financial position. Specifically the Concern should:
Bridge Loans :
HPSIDC also extends bridge loans against term loans sanctioned by it. The financial assistance under this scheme is generally to the extent of 75% of the sanctioned term loan which can be extended upto 90% in special circumstances, against the security of hypothecation of assets, personal guarantee of directors/promoters and/or bank guarantee. This facility is available in case the promoters are unable to fulfil on a timely basis the stipulations laid down during the sanction of term loans due to unforeseen circumstances. Such facility is granted for a period of six months which can be extended for a maximum period upto 12 months. The loans so advanced are subsequently adjusted through disbursement of regular term loan, after all the stipulations are complied with.
NOTE : - The rate of interest, margin and debt equity ratio for availing financial assistance under various schemes as mentioned above are subject to modifications/changes from time to time as may be made by the IDBI /SIDBI or by HPSIDC. The norms regarding debt equity ratio and margin on security can also be varied depending upon the nature/ individual merits of a case.
ESCORT SERVICES :
HPSIDC also provides escort services to entrepreneurs to set up suitable projects in the State. Such services include assistance to entrepreneurs in obtaining statutory clearances/ permissions from Central/ State Government agencies/ departments/ organisations identification of suitable sites for the projects and representing/acting on behalf of the entrepreneurs before the Central/ State Government agencies/ departments/ organisations and also filing applications on their behalf. The HPSIDC charges nominal service charges for such services which are to the tune of 0.5% of the project cost subject to a minimum of Rs.25,000/- plus reimbursement of actual expenditure.