Punjab State Industrial Development Corporation Limited (PSIDC)

Introduction
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 industrialisation in the State of Punjab. Today, PSIDC is engaged in the promotion of large and medium scale projects .

Broad Objectives

• Promotion of industrial and infrastructure projects.
  
• 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.

It was during 70s that PSIDC emerged as an 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 facilitates establishment of ventures in Assisted Sector restricting its equity participation to the extent of 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.