Pratibha Syntex's MP project jolted

In view of depressed market conditions in the textile sector, Indore-based Pratibha Syntex Ltd has failed to go public and put on the back-burner its proposed terry-towel project in Pithampur Apparel Park in Indore.

A state government official said, "They have written a letter and conveyed to us their decision."

The company has also said it will surrender the allotted land area. It has reportedly incurred a "loss of Rs 5 crore during the process." Company Chairman SK Chaudhury was not available for comment.

However, a company executive, SK Bansal, told Business Standard on the phone, "The project has been delayed only since the arrangement for funds has been delayed. The proposed IPO (initial public offer) has been delayed. We have not pulled out of the project."

On the other hand, the managing director of the Audyogik Kendra Vikas Nigam Indore (a subsidiary of the State Industrial Development Corporation), Ashish Shrivastava, said, "They (the company representatives) have mentioned in the fax that market conditions for the textile sector were not favourable and they were unable to raise funds through an IPO at the moment. Project funding was to be arranged through bank loans and equity. Bankers have asked them to raise funds through an IPO. But the company has said the bull run in the market is over for the textile sector and that it has been forced to call off its (SEZ) project."

Shrivastava said, "We will welcome them if they come again." The department of industries had mentioned the project on its investment list many a time.

The company is learnt to have planned a total investment of Rs 600 crore in Madhya Pradesh, with Rs 399 crore for the proposed terry-towel unit in the Indore special economic zone, Rs 194 crore for expanding its unit in Pithampur.

The company had sought uniform concessions on the lines of those offered in the Punjab industry policy, including concessions on premium of land, concession on electricity duty on captive power, etc, since its proposed unit was within 10 km of the existing unit.

The project was to be funded through loans (67 per cent) and equity (33 per cent). A government source has said that of this, the company had proposed 25 per cent from the IPO.