Detailed Project Report
Mushroom Cultivation & Processing
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹49.35 L
- Term loan from bank
- ₹32.08 L
- Promoter’s contribution
- ₹4.94 L
- Subsidy
- ₹12.34 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-11.93 L
- Average DSCR
- -0.65
- Break-even (% of capacity used)
- —
02 Promoter and unit
| Promoter name | — |
|---|---|
| Business / firm name | — |
| Legal form | Proprietorship |
| Address of the unit | — |
| Applicant category | General · Rural |
03 The project
Button/oyster mushrooms in closed rooms — little land, crops all year.
| Main product or service | Mushroom Cultivation & Processing |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Star hotels and restaurants
- Urban households
- Tourist centres
- Canning and drying units
- Direct sale to retailers or consumers; wholesale distribution is mostly missing
- Processed (canned and dried) mushroom trade, which is more organised
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Production unit equipment (200 tonnes a year model) | 1 | 30,00,000 | 30,00,000 |
| Compost and casing unit | 1 | 7,00,000 | 7,00,000 |
| Canning facilities, spawn lab and other equipment | 1 | 10,00,000 | 10,00,000 |
| Total | 47,00,000 |
Pre-filled from: UP MSME 1-Connect (Govt of UP, RAMP) – Project Report: Mushroom Cultivation & Processing; National Horticulture Board – Model Project Report: Button Mushroom. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Cereal straw (paddy or wheat) or sugarcane bagasse — main compost base; about 220 g dry material per 1 kg of mushroom
- Fertiliser salts: urea, superphosphate, gypsum — added while making compost
- Rice bran or wheat bran — compost supplement
- Spawn (mushroom seed) — 0.5–0.75% of compost weight
- Casing soil — garden loam and sand (4:1) or decomposed cow dung and loam (1:1), treated before use
- Perforated polythene bags — for 250–500 g retail packs
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 47.00 |
| Contingency | 2.35 |
| Total fixed capital | 49.35 |
| Working capital margin | 0.00 |
| Total project cost | 49.35 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 4.94 | 10.0 |
| Subsidy | 12.34 | 25.0 |
| Term loan from bank | 32.08 | 65.0 |
| Total | 49.35 | 100.0 |
| Working capital loan (outside project cost) | 0.00 |
09 Key assumptions
| Selling price | ₹0 per units |
|---|---|
| Raw material & packing cost | ₹0 per units |
| Capacity used each year | 60% · 70% · 80% · 80% · 80% · 80% · 80% |
| Term loan interest rate (% a year) | 11% · 84 months (Moratorium 6) |
| Working capital method | Turnover method (RBI) · Working capital interest (% a year) 11% |
| Income tax rate | 25% |
| Yearly price and cost rise | 0% |
10 Production and sales
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capacity used | 60% | 70% | 80% | 80% | 80% | 80% | 80% |
| Production (units) | 6,000 | 7,000 | 8,000 | 8,000 | 8,000 | 8,000 | 8,000 |
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
11 Projected profitability
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Sales | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Raw material and packing | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Power and fuel | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Salaries and wages | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 | 2.88 |
| Rent | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Administration | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Selling and distribution | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Repairs and maintenance | 0.99 | 0.99 | 0.99 | 0.99 | 0.99 | 0.99 | 0.99 |
| Insurance | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 | 0.25 |
| Total cost of operations | 4.11 | 4.11 | 4.11 | 4.11 | 4.11 | 4.11 | 4.11 |
| Operating profit (EBITDA) | -4.11 | -4.11 | -4.11 | -4.11 | -4.11 | -4.11 | -4.11 |
| Depreciation | 7.40 | 6.29 | 5.35 | 4.55 | 3.86 | 3.28 | 2.79 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 3.47 | 3.01 | 2.47 | 1.92 | 1.38 | 0.84 | 0.29 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -14.99 | -13.41 | -11.93 | -10.58 | -9.36 | -8.24 | -7.20 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -14.99 | -13.41 | -11.93 | -10.58 | -9.36 | -8.24 | -7.20 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -14.99 | -13.41 | -11.93 | -10.58 | -9.36 | -8.24 | -7.20 |
| Depreciation | 7.40 | 6.29 | 5.35 | 4.55 | 3.86 | 3.28 | 2.79 |
| Cash accruals (PAT + depreciation) | -7.59 | -7.12 | -6.58 | -6.04 | -5.49 | -4.95 | -4.41 |
| Term loan repaid | 2.47 | 4.94 | 4.94 | 4.94 | 4.94 | 4.94 | 4.94 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -10.05 | -12.06 | -11.51 | -10.97 | -10.43 | -9.89 | -9.34 |
| Cash and bank | -10.05 | -22.11 | -33.62 | -44.60 | -55.02 | -64.91 | -74.25 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 17.27 | 17.27 | 17.27 | 17.27 | 17.27 | 17.27 | 17.27 |
| Reserves and surplus | -14.99 | -28.40 | -40.33 | -50.91 | -60.27 | -68.51 | -75.70 |
| Term loan outstanding | 29.61 | 24.68 | 19.74 | 14.81 | 9.87 | 4.94 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 31.89 | 13.55 | -3.32 | -18.83 | -33.13 | -46.30 | -58.43 |
| Net fixed assets | 41.95 | 35.66 | 30.31 | 25.76 | 21.90 | 18.61 | 15.82 |
| Preliminary expenses not written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Current assets (stock and debtors) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Cash and bank | -10.05 | -22.11 | -33.62 | -44.60 | -55.02 | -64.91 | -74.25 |
| Total assets | 31.89 | 13.55 | -3.32 | -18.83 | -33.13 | -46.30 | -58.43 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.69 | -0.52 | -0.56 | -0.60 | -0.65 | -0.71 | -0.79 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.65 |
|---|---|
| Lowest DSCR | -0.79 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 7.40 | 6.29 | 5.35 | 4.55 | 3.86 | 3.28 | 2.79 |
Written-down value method at Income-tax Rules block rates (building 10%, plant & machinery 15%, furniture 10%, computers 40%). Change them if your CA uses other rates.
16 Term loan repayment
| Year | Opening | Interest | Term loan repaid | Closing |
|---|---|---|---|---|
| 1 | 32.08 | 3.47 | 2.47 | 29.61 |
| 2 | 29.61 | 3.01 | 4.94 | 24.68 |
| 3 | 24.68 | 2.47 | 4.94 | 19.74 |
| 4 | 19.74 | 1.92 | 4.94 | 14.81 |
| 5 | 14.81 | 1.38 | 4.94 | 9.87 |
| 6 | 9.87 | 0.84 | 4.94 | 4.94 |
| 7 | 4.94 | 0.29 | 4.94 | 0.00 |
17 Licences and registrations
- Udyam
- GST (on processing)
- FSSAI (for selling packed/processed products)
- Electricity connection (agri/commercial)
18 Government schemes that may apply
- NHB Capital Investment Subsidy – Commercial Horticulture & Cold Storage (Scheme 1 and Cold Storage Scheme)
- PM Formalisation of Micro Food Processing Enterprises (PM FME)
- Pradhan Mantri MUDRA Yojana (PMMY) – Shishu, Kishor, Tarun, Tarun Plus
- Prime Minister's Employment Generation Programme (PMEGP)
- Agriculture Infrastructure Fund (AIF)
19 Sources
- UP MSME 1-Connect (Govt of UP, RAMP) – Project Report: Mushroom Cultivation & Processing — https://msme1connect.up.gov.in/Projectreport/Project%20Report638665945067973721.pdf
- National Horticulture Board – Model Project Report: Button Mushroom — https://nhb.gov.in/model-project-reports/Horticulture%20Crops%5CButton%20Mushroom%5CButton%20Mushroom1.htm
- FSSAI – Public Notice: List of mapped ITC HS codes with FSS Regulations — https://fssai.gov.in/upload/advisories/2020/03/5e6b37c994302Public_Notice_HS_Code_13_02_2020.pdf
- APEDA – Product groups (Cereals, Processed Foods, Animal Products, Fruits & Vegetables, Floriculture) — https://apeda.gov.in/
This report is a projection from the figures entered by the promoter. It is not a bank appraisal or a guarantee of a loan or subsidy. Check every figure with current quotations and your chartered accountant before submitting it.