In a move to generate additional revenue, Karnataka Soaps and Detergents Limited (KSDL), the maker of the iconic Mysore Sandal Soap, plans to unlock the value of around 10 acres of prime land within its factory premises in Malleshwaram (West), Bengaluru, through a public-private partnership (PPP) model.
According to KSDL, the land parcel - about 10.32 acres - will be developed for office or commercial use. The state-run enterprise has invited proposals for the appointment of a transaction advisor to assist in the development and structuring of the project.
“The 10-acre parcel will be divided into four parts, and the selected consultant will recommend whether to develop it as office space or residential projects. Since the location is close to a Metro station, the land value is expected to be high,” a senior official told Moneycontrol.
Plan to unlock land value
“The proposed land parcels are to be optimally developed to mobilise additional financial resources for KSDL. It is envisaged that the project will be undertaken in partnership with a private sector investor who will bring in the required funds and expertise to unlock and capture the commercial potential of the land,” the KSDL tender document said.
Under the proposed PPP structure, KSDL’s contribution will be in the form of land, while the private partner will be responsible for designing, building, financing, operating, and transferring (DBFOT) the project. Revenue generated from the development will be shared between KSDL and the private entity.
Role of transaction advisor
The transaction advisor will assist KSDL in carrying out a series of studies and preparatory activities required to select a suitable private partner. The advisor’s scope includes land suitability analysis, market assessment, project conceptualisation, financial modelling, and the development of bidding documents such as the Request for Proposal (RFP) and concession agreements.
The consultant will also undertake financial viability studies from an investor’s perspective and assist in structuring the project to attract credible private participation.
Also, read: Mysore Sandal soap-maker KSDL to launch perfumes, dish-wash bar
Strategic location
The identified land lies within the Mysore Sandal Soap factory premises in Malleshwaram West, adjacent to the Mysore Sandal Soap Factory Metro Station on the Bengaluru–Pune Highway (West of Chord Road). The site is strategically located at the intersection of Tumakuru Road, Chord Road, and the Outer Ring Road - an area that hosts major commercial and residential developments, including Brigade Gateway and the World Trade Center.
KSDL stated that the site’s proximity to major roads and the metro network enhances its potential for commercial and mixed-use development.
Feasibility and PPP structuring
The feasibility study will assess the project’s suitability in terms of connectivity, available infrastructure, and compliance with development control regulations. It will also analyse regional real estate trends, potential product mixes, and financial sustainability.
The advisor is expected to recommend optimal development options, prepare detailed project cost estimates, and perform financial modelling to evaluate indicators such as the internal rate of return (IRR) and net present value (NPV).
The project structuring phase will examine various PPP modalities, risk-sharing mechanisms, and licensing requirements, aiming to recommend the most suitable partnership model for KSDL.
Before launching the formal bidding process, the transaction advisor will conduct a market-sounding exercise to gauge private sector interest and gather feedback from potential investors and lenders.
Also, read: Tamannaah Bhatia becomes brand ambassador of iconic Mysore Sandal Soap, signs Rs 6.2 crore deal
Record performance in FY 2024–25
KSDL, in 2024–25, recorded transactions worth Rs 1,788 crore and a net profit of Rs 416 crore. In 2023–24, the company achieved sales of Rs 1,570 crore with a profit of Rs 362 crore. The firm manufactures 19 products, including soaps, handwash, shower gels, and incense sticks, and plans to boost profits through market expansion and improved production efficiency.
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