Capex Project Final Report

Group 5:

      Sumit Taneja B13056

      Vaibhav Chopra B13059

      Gourav Poddar B13087

      Vaibhav Chamoli B13178

      Varun Anand B13179

The Assistant General Manager

State Bank of India

Jamshedpur  

Subject: Request for a term loan of INR 38.34 Crores

Dear Sir,

We take this opportunity to commend your services and dedication in building sustainable infrastructure in Jamshedpur through responsible participation.

The city of Jamshedpur has been flourishing under the auspices of the Tata legacy since 1907. It is a city with one of the highest per capita income in the country. It has served as the focal point of India’s industrial development and the development story. Over the years, the city has developed various other industries in addition to the pioneering enterprise of the steel behemoth, Tata Steel Ltd. Another manufacturing facility by the same group in the city is that of Tata Motors. Given the government’s focus on promoting the city and its suburbs (including Adityapur) as a major industrial center in the east zone of India, the city is slated to witness considerable growth in business and allied activities.

Additionally, Jamshedpur is also known as a leader in producing quality engineers and managers. Xavier Labour Relations Institute (XLRI) is a world class business school which offers post graduate programs in management. At the undergraduate level, the National Institute of Technology (NIT) Jamshedpur is an institute of national importance and offers degree courses across a plethora of engineering disciplines. Over the years, a large number of executives and professionals have come into the city along with their family to work for the Tata’s. However, despite having such reputed institutes of education, Jamshedpur has lacked a high quality institute providing world-class education in the field of Science (non-technical), Social Sciences and Commerce. Given the socio-economic importance of the city, it is critical that education services provided are of highest standard.

In this light, our company Sisyphus Private Limited has decided to build an under-graduate university catering to the demand of students in science, arts and commerce field of study. Increasing demand and immense potential in the higher education sector provides an excellent business opportunity and a chance to provide quality education at affordable costs in a traditionally deprived region around Jamshedpur. The financial case for the same has been built henceforth.

Business Model

The university is expected to begin its operations from 1St April 2016. Expected gestation period for the construction activities is anticipated to be 1 year. We have planned to start the construction activities from 1st April 2015. However the work on this project would start from 1st October 2014. We will spend the initial 6 months in getting the regulatory approvals. A land of around 10 acres would be acquired on lease in Adityapur region for 15 years at a lease rental of 22 lakhs each year. Also the capital expenditures would be done in different phases as we would not need the full infrastructure for the initial years. However we plan to build the complete administration and academic block before the start of the university so that it does not hinder the process of getting regulatory approvals.

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