IL&FS Investment Managers is pumping in about Rs 75 crore into Trichy-based GK Industrial Park catering to small and medium enterprises (SMEs) in fabrication work, mostly servicing the PSU behemoth Bharat Heavy Electricals (BHEL). IL&FS will take a majority stake in the venture developing the industrial cluster, sources said.
The park, coming up on 600 acres outside Trichy, will provide integrated industrial infrastructure to micro units and SMEs, which when completed over the next three years, will have over 150 units generating employment for around 10,000 people. Local industrialist KG Muralidharan, who floated the venture, will keep a minority stake post the transaction with IL&FS. Veda Corporate Advisors were the advisors to the transaction. When contacted, Mr Muralidharan confirmed the equity deal with IL&FS. Sources said IL&FS saw the transaction as part of a drive to bolster the alternate asset class, while stirring up industrial development among the SME sector that holds huge potential for investors like them. The total project cost for developing the park is estimated at Rs 320 crore.
Following the transaction with IL&FS, the company is holding discussions with a consortium of banks to raise debt financing to develop the 250-acre first phase. GK Industrial Park expects to generate revenue through the sale of simple plots, rentals from developed sites, and through deferred sale route to the prospective industrial units. We have already made considerable progress with the first phase. There are about 20-35 micro units and SMEs that are moving into the project, Mr Muralidharan added. Sources said BHEL, which is expected to source heavily from the park, was likely to set up raw material and finished goods stockyards adjacent the park. It is believed that the park promoters are also in talks with private sector players like Jindal Group to prop up the business prospects of its units.