Detailed Project Report
Red Iron Oxide Pigment
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹13.23 L
- Term loan from bank
- ₹8.60 L
- Promoter’s contribution
- ₹1.32 L
- Subsidy
- ₹3.31 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-5.31 L
- Average DSCR
- -1.88
- 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
Turn ferrous sulphate from steel-pickling waste into red iron oxide pigment for paints, primers, plastics and ceramics.
| Main product or service | Red Iron Oxide Pigment |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Paint and primer makers
- Plastics and rubber makers
- Ceramic makers
- Polishing-compound makers
- Direct supply to paint and primer factories
- Chemical traders
- Industrial buyers through tenders
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| Hammer or ball mill | 1 | 4,00,000 | 4,00,000 |
| Rotary kiln | 1 | 1,75,000 | 1,75,000 |
| MS storage tanks (× 2) | 1 | 1,00,000 | 1,00,000 |
| Boiler, 100 psi, 100 kg/hr, with chimney and pipeline | 1 | 2,25,000 | 2,25,000 |
| Basket centrifuge, 24" diameter | 1 | 80,000 | 80,000 |
| Vacuum evaporator | 1 | 60,000 | 60,000 |
| 48-tray electric drier (32" × 32" × 4") (× 2) | 1 | 1,70,000 | 1,70,000 |
| Miscellaneous equipment (storage tank, pump, furniture) (× 1 lot) | 1 | 50,000 | 50,000 |
| Total | 12,60,000 |
Pre-filled from: PMEGP sample project report — Red Iron Oxide (prepared by Udyami/Samadhan); DGFT — ITC(HS) classification of export and import items. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Ferrous sulphate heptahydrate — 300 tonnes a year at ₹22,000 a tonne in the report
- Sulphuric acid — 150 tonnes a year at ₹10,000 a tonne
- Sodium carbonate — 180 tonnes a year at ₹3,000 a tonne
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 12.60 |
| Contingency | 0.63 |
| Total fixed capital | 13.23 |
| Working capital margin | 0.00 |
| Total project cost | 13.23 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 1.32 | 10.0 |
| Subsidy | 3.31 | 25.0 |
| Term loan from bank | 8.60 | 65.0 |
| Total | 13.23 | 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 | 0.26 | 0.26 | 0.26 | 0.26 | 0.26 | 0.26 | 0.26 |
| Insurance | 0.07 | 0.07 | 0.07 | 0.07 | 0.07 | 0.07 | 0.07 |
| Total cost of operations | 3.21 | 3.21 | 3.21 | 3.21 | 3.21 | 3.21 | 3.21 |
| Operating profit (EBITDA) | -3.21 | -3.21 | -3.21 | -3.21 | -3.21 | -3.21 | -3.21 |
| Depreciation | 1.98 | 1.69 | 1.43 | 1.22 | 1.04 | 0.88 | 0.75 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 0.93 | 0.81 | 0.66 | 0.52 | 0.37 | 0.22 | 0.08 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -6.13 | -5.70 | -5.31 | -4.94 | -4.62 | -4.32 | -4.04 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -6.13 | -5.70 | -5.31 | -4.94 | -4.62 | -4.32 | -4.04 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -6.13 | -5.70 | -5.31 | -4.94 | -4.62 | -4.32 | -4.04 |
| Depreciation | 1.98 | 1.69 | 1.43 | 1.22 | 1.04 | 0.88 | 0.75 |
| Cash accruals (PAT + depreciation) | -4.14 | -4.02 | -3.87 | -3.73 | -3.58 | -3.44 | -3.29 |
| Term loan repaid | 0.66 | 1.32 | 1.32 | 1.32 | 1.32 | 1.32 | 1.32 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -4.80 | -5.34 | -5.19 | -5.05 | -4.90 | -4.76 | -4.61 |
| Cash and bank | -4.80 | -10.14 | -15.34 | -20.39 | -25.29 | -30.05 | -34.66 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 4.63 | 4.63 | 4.63 | 4.63 | 4.63 | 4.63 | 4.63 |
| Reserves and surplus | -6.13 | -11.83 | -17.14 | -22.08 | -26.70 | -31.01 | -35.05 |
| Term loan outstanding | 7.94 | 6.62 | 5.29 | 3.97 | 2.65 | 1.32 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 6.44 | -0.58 | -7.21 | -13.48 | -19.42 | -25.06 | -30.42 |
| Net fixed assets | 11.25 | 9.56 | 8.12 | 6.91 | 5.87 | 4.99 | 4.24 |
| 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 | -4.80 | -10.14 | -15.34 | -20.39 | -25.29 | -30.05 | -34.66 |
| Total assets | 6.44 | -0.58 | -7.21 | -13.48 | -19.42 | -25.06 | -30.42 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -2.02 | -1.51 | -1.62 | -1.75 | -1.90 | -2.07 | -2.29 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -1.88 |
|---|---|
| Lowest DSCR | -2.29 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 1.98 | 1.69 | 1.43 | 1.22 | 1.04 | 0.88 | 0.75 |
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 | 8.60 | 0.93 | 0.66 | 7.94 |
| 2 | 7.94 | 0.81 | 1.32 | 6.62 |
| 3 | 6.62 | 0.66 | 1.32 | 5.29 |
| 4 | 5.29 | 0.52 | 1.32 | 3.97 |
| 5 | 3.97 | 0.37 | 1.32 | 2.65 |
| 6 | 2.65 | 0.22 | 1.32 | 1.32 |
| 7 | 1.32 | 0.08 | 1.32 | 0.00 |
17 Licences and registrations
- Udyam
- GST
- Consent to establish and operate from the State Pollution Control Board
- Hazardous-waste authorisation if spent pickle liquor is handled
- BIS standard IS 44 for iron oxide pigments (quality benchmark)
18 Government schemes that may apply
- Prime Minister's Employment Generation Programme (PMEGP)
- Pradhan Mantri MUDRA Yojana (PMMY) – Shishu, Kishor, Tarun, Tarun Plus
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- PMEGP sample project report — Red Iron Oxide (prepared by Udyami/Samadhan) — https://pmegp.msme.gov.in/Home/DownloadDocument?fileName=Documents/ProjectSampleReport/Red_Iron_Oxide_%28_Samadhan_Projects_%29.pdf
- DGFT — ITC(HS) classification of export and import items — https://www.dgft.gov.in/CP/?opt=itchs-import-export
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.