How banks evaluate cold storage projects

Project viability — capacity vs catchment demand, occupancy assumptions and tariff.
Promoter background — KYC, experience, net worth, existing exposure and credit history.
Technical design — PUF panel quality, equipment OEM, layout, civil scope and capacity calculation.
Means of finance — promoter margin, term loan, working capital and any subsidy back-end.
Repayment capacity — projected revenue, operating cost, DSCR and stress-tested cash flow.
Security — land/building collateral, plant & machinery hypothecation, personal guarantee.

Promoter contribution

Typically a portion of project cost contributed upfront by the promoter.
Exact margin depends on bank policy, project type, MSME/AIF eligibility and borrower profile.
Promoter contribution can include land value, civil work done, advances paid to vendors.

Term loan funds project cost (panels, machinery, civil, electrical, installation).
Working capital covers electricity, manpower, AMC, repairs, rentals and operating overheads.
Banks may bundle both as a composite facility for cold storage projects.

Primary security: project assets (land, building, plant & machinery).
Collateral security: additional immovable property, fixed deposits or third-party guarantees as bank may require.
MSMEs may be eligible for CGTMSE; AIF projects may carry CGTMSE-equivalent credit guarantee — verify with bank.

DPR (Detailed Project Report): technical, financial and market analysis of the project.
CMA data: standard banking format showing past performance and projected financials.
DSCR: Debt Service Coverage Ratio — must comfortably exceed 1 in projected years.
Projected balance sheet, P&L and cash flow for the loan tenure.

Weak market justification — fix with a clear catchment, demand and tariff narrative in DPR.
Under-sized promoter margin — show source of margin clearly (land, savings, family).
Aggressive revenue projection — use conservative occupancy and tariff assumptions.
Missing technical certification — share OEM technical data sheets (compressor, PUF panel, controls).
Land title issues — clear chain of title, NOC, mutation and lease registration where applicable.

A typical bank file for a cold storage term loan. Exact list depends on entity type and bank policy.

Project cost (₹)

Promoter margin (%)

Interest rate (% p.a.)

Tenure (years)

Moratorium (months)

Apply interest subvention

Subsidy received later (back-end)

Loan amount

₹ 75,00,000

Effective interest rate

11.00% p.a.

Estimated EMI

₹ 1,35,013

Approx. total interest over tenure

₹ 30,30,979

Net effective project burden

₹ 1,00,00,000

Combine your HyperCold quotation with the right DPR and the right scheme route.