Project

on
Ayurvedic
Medicine
Manufacturing

Prepared By:
Nancy Phogat
Deepti Sharma
Chanda Rajkumar
Vivek Vardhan
Sachin Yadav
Shalabh Agarwal
Why Ayurvedic Medicine ?
Increased emphasis on lifestyle and wellness, driven
by a rise in non-communicable and chronic
diseases, is driving the demand for Ayurveda in
India, according to a report by Confederation of
Indian Industry (CII) and PricewaterhouseCoopers
(PwC).

The global market for Ayurveda is also growing. The

size of the global Ayurveda market is expected to
almost treble from $3.4 billion in 2015 to $9.7 billion
by 2022.

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Where to install our plant for production and operation ?
We will be establishing our unit in Delhi NCR, as we want to serve the market of
Delhi and as we are from Delhi , it will be easy for us to manage operations.

List of licenses required to start a manufacturing plant

Complete manufacturing license (we will be doing both marketing and

production).

To manufacture Ayurvedic/Herbal products in India, we need a license from

AYUSH and not from FSSAI. The Ministry of AYUSH is located at INA and The
AYUSH Department of Delhi is located in Tibbia college, Karol Bagh.

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 Estimated Project Cost

1. Building & Construction 20,00,000

2. Product & Machinery 15,00,000
3. Furniture & Fixtures etc. 2,00,000
4. Staff Labor 1,00,000 (Per Month)
5. Raw Material 5,00,000 (Per Month)
6. Other Expenses 20,000 (Per Month)

Total Recurring Expenses = 1,00,000 + 5,00,000 + 20,000

= 6,20,000 (Per month)

Working Capital For 4 months = 4 x 6,20,000 = 24,80,000

Total Cost = 20,00,000 + 15,00,000 + 2,00,000 + 24,80,000 =

= 61,80,000

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 Cost of Production for 1 Year

“ Recurring Expenses (620000 *12 )

74,40,000
Depreciation on plant and Machinery @ 10%
1,50,000
Depreciation on Furnitures @10%
20,000
Total Costs 76,10,000

Expected Profit @ 30% on Total Cost = 7610000 * 30 /

100
= 2283000

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Fund Raising

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Capital 3180000
Debt @11.5% 2385000
Equity 725000
Number of shares @10 /- per share 79500
EBIT 2283000
Interest Paid @ 11.5% -274275
EBT (PBT) 2008725
GST @ 5% -100436.25
PAT 1908289

EPS = PAT/ No. of Shares = 1908289/79500 = 20

Cost of Debt = i (1-t) = 11.5%(1-5%) = 10.9%

P/E Ratio = 3 Times (Assumption)

Cost of Equity = 1/(P/E) = 1/3 = 33.33 %

Overall Cost of Capital (O)= Cost of Debt * Weight of Debt + Cost of Equity * Weight of
Equity

Case 1 : 75% Debt & 25% Equity

O = 0.109 * 0.75 + 0.33 * 0.25 = 0.08175 + 0.0825 = 0.164 = 16.42 %

Case 2 : 100 % Equity

O = 0.33 * 1 = 0.33 = 33.33 %

Case 3 : 100 % Debt

0 = 0.109 * 1 = 0.109 = 10.9 %

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Thanks
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