GVK, the Hyderabad-based infrastructure developer, is looking for an anchor investor so that it can revive its special economic zone (SEZ) project in Tamil Nadu.
GVK and Tamil Nadu Industrial Development Corporation Ltd (TIDCO) have plans to develop a multi-product SEZ, spread over 3,000 acres, at Perambalur. The SEZ will offer manufacturing facilities to industries like textiles, leather, engineering goods, pharmaceuticals, power, information technology and information technology enabled services, metals, fertilisers, chemicals, floriculture, horticulture and electronics.
“We are in talks for a major investor i.e. like an anchor, and that is the first step. We are going a little slow on the project as of now. After a big investor comes in, we will speed up the development of our SEZ. An anchor is very important in business to get the project off the ground,” G V Krishna Reddy, chairman and managing director of GVK Power and Infrastructure Ltd, told Business Standard.
GVK is in the process of completing statutory requirements and building basic infrastructure for the SEZ.
According to the company, the SEZ is seeing a lot of interest from manufacturers in the aviation sector. “There is a requirement for large pieces of land in the aviation sector. There is a lot of interest from players in that sector,” Reddy said. But he refused to name the investors that they were in talks with.
The project is expected to attract investments worth Rs 5,000 crore in seven years and generate annual export earnings of around Rs 6,000 crore. The SEZ is implemented through GVK Infratech, a special purpose vehicle. GVK Infratech is a wholly-owned subsidiary of GVK Power and Infrastructure.
According to analysts, companies, which have put their SEZ plans on hold, should revive them now as the financial markets have become healthier and funding is easily available.
“I think it is the right time for companies to revive their SEZ plans. In between, most companies announced big plans in this space, which were cut because of slowdown. But we believe that the overall export scenario in the country will remain good, which will require companies to go for special economic zones. We will see manufacturing sectors like jewellery export units, to set up shop here as they look for tax benefits that they offer,” said Sarabjit Kaur Nagra, vice-president - research, Angel Broking.
