Detailed Project Report
MS Welded Link Chain Manufacturing
—
Prepared on: 13 November 2026 · Prepared with Building Business DPR (buildingbusiness.in)
01 Project at a glance
- Total project cost
- ₹39.38 L
- Term loan from bank
- ₹35.44 L
- Promoter’s contribution
- ₹3.94 L
- Sales · Year 3
- ₹0.00 L
- Profit after tax · Year 3
- ₹-10.86 L
- Average DSCR
- -0.55
- 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
Bend mild-steel wire rod into links and butt-weld each link to make 8, 10 and 12 mm chain for lifting, transport and farm use.
| Main product or service | MS Welded Link Chain Manufacturing |
|---|---|
| Installed capacity per year (at 100%) | 10,000 units |
04 Market
- Makers of cranes, chain pulley blocks and conveyors
- Road transporters and railways
- Fishing and shipping trade
- Dairies and farms
- Direct supply to equipment makers
- Hardware and industrial wholesalers
05 Plant and machinery
| Item | Qty | ₹ | Total ₹ |
|---|---|---|---|
| MS butt-welded link making plant for 5 to 12 mm wire (each set: 1 bending machine and 2 electro-mechanical welding machines) (× 2 sets) | 1 | 33,50,000 | 33,50,000 |
| Tumbling barrel with reduction gearbox and 5 HP motor (× 2) | 1 | 50,000 | 50,000 |
| Gas welding equipment with torch | 1 | 15,000 | 15,000 |
| Double-ended pedestal grinder, 10 inch wheel, 1 HP motor | 1 | 10,000 | 10,000 |
| Pickling tank, locally fabricated (× 2) | 1 | 10,000 | 10,000 |
| Platform weighing machine | 1 | 15,000 | 15,000 |
| Link calibrating machine with 3 HP motor | 1 | 50,000 | 50,000 |
| Load testing machine with 5 HP motor | 1 | 1,00,000 | 1,00,000 |
| Dies, tools and fixtures | 1 | 1,50,000 | 1,50,000 |
| Total | 37,50,000 |
Pre-filled from: DC-MSME project profile — Link Chain. Prices in older reports will have gone up — enter today’s quotations.
06 Raw materials
- Mild-steel wire rod, 8, 10 and 12 mm — 25.3 tonnes a month at ₹32,000 a tonne
- Welding material and consumables — ₹15,000 a month
- Wooden packing cases and PP strips — 500 a month at ₹40 each
07 Cost of project
| ₹ in lakh | |
|---|---|
| Plant and machinery | 37.50 |
| Contingency | 1.88 |
| Total fixed capital | 39.38 |
| Working capital margin | 0.00 |
| Total project cost | 39.38 |
08 Means of finance
| ₹ in lakh | % | |
|---|---|---|
| Promoter’s contribution | 3.94 | 10.0 |
| Term loan from bank | 35.44 | 90.0 |
| Total | 39.38 | 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 | 0.79 | 0.79 | 0.79 | 0.79 | 0.79 | 0.79 | 0.79 |
| Insurance | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 | 0.20 |
| Total cost of operations | 3.86 | 3.86 | 3.86 | 3.86 | 3.86 | 3.86 | 3.86 |
| Operating profit (EBITDA) | -3.86 | -3.86 | -3.86 | -3.86 | -3.86 | -3.86 | -3.86 |
| Depreciation | 5.91 | 5.02 | 4.27 | 3.63 | 3.08 | 2.62 | 2.23 |
| Preliminary expenses written off | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Interest on term loan | 3.84 | 3.32 | 2.72 | 2.12 | 1.52 | 0.92 | 0.32 |
| Interest on working capital | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit before tax | -13.61 | -12.21 | -10.86 | -9.62 | -8.47 | -7.41 | -6.42 |
| Income tax | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Profit after tax | -13.61 | -12.21 | -10.86 | -9.62 | -8.47 | -7.41 | -6.42 |
12 Cash flow
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Profit after tax | -13.61 | -12.21 | -10.86 | -9.62 | -8.47 | -7.41 | -6.42 |
| Depreciation | 5.91 | 5.02 | 4.27 | 3.63 | 3.08 | 2.62 | 2.23 |
| Cash accruals (PAT + depreciation) | -7.70 | -7.19 | -6.59 | -5.99 | -5.39 | -4.79 | -4.19 |
| Term loan repaid | 2.73 | 5.45 | 5.45 | 5.45 | 5.45 | 5.45 | 5.45 |
| Owner’s drawings | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Surplus after repayment | -10.43 | -12.64 | -12.04 | -11.44 | -10.84 | -10.24 | -9.64 |
| Cash and bank | -10.43 | -23.07 | -35.11 | -46.55 | -57.39 | -67.63 | -77.27 |
13 Projected balance sheet
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Capital (own + subsidy) | 3.94 | 3.94 | 3.94 | 3.94 | 3.94 | 3.94 | 3.94 |
| Reserves and surplus | -13.61 | -25.81 | -36.67 | -46.29 | -54.76 | -62.17 | -68.58 |
| Term loan outstanding | 32.71 | 27.26 | 21.81 | 16.36 | 10.90 | 5.45 | 0.00 |
| Working capital loan | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total liabilities | 23.04 | 5.38 | -10.92 | -25.99 | -39.92 | -52.78 | -64.65 |
| Net fixed assets | 33.47 | 28.45 | 24.18 | 20.55 | 17.47 | 14.85 | 12.62 |
| 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 | -10.43 | -23.07 | -35.11 | -46.55 | -57.39 | -67.63 | -77.27 |
| Total assets | 23.04 | 5.38 | -10.92 | -25.99 | -39.92 | -52.78 | -64.65 |
14 Ratios and break-even
| Year | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Debt service coverage ratio (DSCR) | -0.59 | -0.44 | -0.47 | -0.51 | -0.55 | -0.61 | -0.67 |
| Break-even (% of capacity used) | — | — | — | — | — | — | — |
| Cash break-even | — | — | — | — | — | — | — |
| Average DSCR | -0.55 |
|---|---|
| Lowest DSCR | -0.67 |
| Payback period | — |
15 Depreciation
| Year → (₹ in lakh) | 1 | 2 | 3 | 4 | 5 | 6 | 7 |
|---|---|---|---|---|---|---|---|
| Depreciation | 5.91 | 5.02 | 4.27 | 3.63 | 3.08 | 2.62 | 2.23 |
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 | 35.44 | 3.84 | 2.73 | 32.71 |
| 2 | 32.71 | 3.32 | 5.45 | 27.26 |
| 3 | 27.26 | 2.72 | 5.45 | 21.81 |
| 4 | 21.81 | 2.12 | 5.45 | 16.36 |
| 5 | 16.36 | 1.52 | 5.45 | 10.90 |
| 6 | 10.90 | 0.92 | 5.45 | 5.45 |
| 7 | 5.45 | 0.32 | 5.45 | 0.00 |
17 Licences and registrations
- Udyam registration
- GST registration
- Factory licence where the worker and power limits apply
- Trade licence from the local body
- State Pollution Control Board consent (acid pickling)
- BIS standards for link chain (IS 2429, IS 3109, IS 6216) to follow for testing
18 Government schemes that may apply
- Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE)
19 Sources
- DC-MSME project profile — Link Chain — https://www.dcmsme.gov.in/old/reports/mechanical/Linkchain.pdf
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.