Indicative ₹2 Crore financing for a agarbatti manufacturing + a full bank-ready report with CMA data, DSCR ≥ 1.50 and 5-year projections.
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Are you planning to set up an agarbatti manufacturing unit in India with a ₹2 Crore investment? This page provides a ready-to-use bank loan project report tailored for a ₹2 Crore project, covering term loan of ₹1.80 Crore and promoter margin of ₹20 Lakh. The report includes CMA data, DSCR analysis, and 5-year financial projections, essential for loan approval under schemes like PMEGP, MUDRA Kishor (₹10 Lakh+), and PM Vishwakarma (up to ₹1 Lakh for tools). Agarbatti manufacturing (NIC 32909) is a high-demand sector with 15-20% profit margins. A bank-ready report helps you secure funding faster by demonstrating viability to lenders like SBI, Canara Bank, or regional rural banks. We explain EMI (approx ₹3,08,204/month at 11% over 7 years), subsidy eligibility (PMEGP: 35% subsidy on project cost up to ₹50 Lakh, but here capital subsidy capped at ₹17.5 Lakh), and step-by-step documentation. Whether you're in Bangalore, Delhi, or a small town, this guide covers local nuances, raw material sourcing, and compliance. Let's dive into the details.
For a ₹2 Crore agarbatti unit, eligibility depends on the scheme. Under PMEGP, the project cost cap is ₹50 Lakh for manufacturing, so the ₹2 Crore project exceeds the limit. However, you can still apply for a term loan under MUDRA Kishor (loans from ₹10 Lakh to ₹20 Lakh) but that's far below ₹1.80 Cr. Practically, your best bet is a conventional term loan from a bank under CGTMSE (credit guarantee up to ₹2 Cr) or NABARD's refinance for MSMEs. PM Vishwakarma offers up to ₹1 Lakh for tools, not for large projects. For the ₹2 Crore scale, you need a strong CIBIL score (750+), 3 years of business experience (or a detailed project report), and collateral security (land/building). The promoter margin of ₹20 Lakh (10%) is lower than typical 20-25%, so banks may ask for additional collateral or a higher margin. Consider partnering or bringing in more equity to improve loan chances.
The total project cost of ₹2 Crore includes: land & building (₹60 Lakh if rented, else purchase cost), plant & machinery (₹80 Lakh – agarbatti rolling machines, drying chambers, packaging units), working capital (₹40 Lakh for raw materials like bamboo sticks, charcoal powder, fragrance oils, and packaging), and preliminary expenses (₹20 Lakh for licenses, GST registration, and project report). Financing: Promoter contribution ₹20 Lakh (10%), Term loan ₹1.80 Cr (90%) from bank. Loan tenure 7 years, interest rate ~11% (MCLR + spread). EMI calculated at ₹3,08,204/month. DSCR should be above 1.5; with projected net profit of ₹25-30 Lakh/year, DSCR comes to ~1.8. Banks will ask for collateral of at least ₹1.80 Cr (land, building, or FD). If you lack collateral, apply under CGTMSE where guarantee covers up to 75% of loan (fee 1% for MSMEs).
To apply for a ₹2 Crore agarbatti loan, prepare: 1) KYC of promoters (Aadhaar, PAN, Voter ID). 2) Business proof – GST registration, Udyam registration, trade license. 3) Project report with CMA data, 5-year financial projections, DSCR calculation. 4) Land documents (title deed, lease agreement, or rent agreement). 5) Quotations for machinery from suppliers (e.g., from Delhi or Mumbai). 6) Last 3 years ITR if existing business, or audited balance sheet. 7) CIBIL report (individual and company). 8) Collateral documents (property papers, valuation report). 9) Scheme-specific forms (PMEGP application, CGTMSE cover letter). Ensure all documents are self-attested and notarized where required. Banks may also ask for a detailed marketing plan (export potential, local demand).
For a ₹2 Crore project, direct subsidy from PMEGP is limited (max ₹17.5 Lakh for general category, but only up to ₹50 Lakh project cost). Since your project exceeds that, you won't get PMEGP subsidy on the full amount. However, you can avail interest subvention under MUDRA (if loan is ≤₹20 Lakh) – not applicable here. PM Vishwakarma provides up to ₹1 Lakh for tools, negligible. State subsidies: Many states (e.g., Uttar Pradesh, Madhya Pradesh, Gujarat) offer capital investment subsidy of 10-15% for MSMEs in agarbatti clusters (e.g., Kannauj, Mysore). Check your state's industrial policy. Also, GST refund on raw materials (if exporting) can help. For working capital, you can get collateral-free loan up to ₹2 Cr under CGTMSE by paying guarantee fee (1% for MSMEs). No direct subsidy on interest, but negotiate with bank for lower rate (e.g., 9.5% for women entrepreneurs).
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Financing structured for a ₹2 Crore agarbatti manufacturing: margin, term loan & EMI.
Scheme-ready for PMEGP, MUDRA Kishor, PM Vishwakarma.
Exact means of finance, CMA, DSCR ≥ 1.50 in the generated report.
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Indicatively ≈ ₹3,08,204/month on the ~₹1.80 Cr term-loan portion (at 11% over 7 years), with ~₹20 Lakh promoter margin. The report computes exact figures.
Banks typically expect ~10% margin — about ₹20 Lakh for a ₹2 Crore project — plus any scheme subsidy.
PMEGP, MUDRA Kishor, PM Vishwakarma fit this range. The report is configured to your chosen scheme.
Under CGTMSE, collateral-free loans up to ₹2 Cr are available for MSMEs. However, the bank may still ask for collateral for loans above ₹50 Lakh. CGTMSE covers 75% of the loan amount in case of default, reducing bank risk. To improve chances, ensure a strong project report with DSCR >1.5, good CIBIL (750+), and at least 10% promoter contribution. Some banks (e.g., SBI, HDFC) offer collateral-free loans up to ₹1 Cr under CGTMSE; for ₹1.80 Cr, partial collateral may be required.
EMI = [P x R x (1+R)^N] / [(1+R)^N-1], where P=₹1,80,00,000, R=11%/12=0.009167, N=84 months. EMI ≈ ₹3,08,204 per month. Total interest payable over 7 years: approx ₹79.2 Lakh. Use a loan calculator to verify. Ensure your monthly net profit covers at least 1.5 times the EMI (i.e., ₹4.62 Lakh) for a healthy DSCR.
No, PMEGP has a maximum project cost of ₹50 Lakh for manufacturing units. For a ₹2 Cr project, you cannot get PMEGP subsidy. However, you can still apply for a term loan under PMEGP for a smaller component (e.g., ₹50 Lakh) and fund the rest separately, but that's complex. Better to opt for a conventional loan under CGTMSE or state subsidy schemes. Alternatively, split the project into multiple units under different entities to avail PMEGP benefits.
The report must include: 1) 5-year projected profit & loss, balance sheet, cash flow. 2) CMA data (current ratio, debt-equity ratio, DSCR). 3) Break-even analysis (expected at 60-70% capacity). 4) Assumptions: production capacity (e.g., 500 kg/day), selling price (₹150/kg), raw material cost (₹80/kg), labor cost (₹20/kg). 5) Loan repayment schedule. For a ₹2 Cr project, target annual turnover of ₹3-4 Cr with 20% net margin. DSCR should be >1.5, debt-equity ratio <2:1.