Cosmo is promoted by Mr. Ashok Jaipuria (sponsor), who separated from the Jaipuria family, a large Indian industrial group, and independently established Cosmo in 1976 with personal funds and a ten-year interest free government loan, which was repaid within three years. Mr. Jaipuria's business group also includes Cosmo Ferrites Limited (CFL), in which Cosmo has a 46% shareholding, and one small company - Sterling Oxides Limited. The sponsor, together with associated investment companies, has a 49.02% shareholding in Cosmo. Other shareholders are Indian and foreign financial institutions (3.84%), other corporate bodies (10.42%) and the general public (36.72%).

The proposed IFC investment is $4.0 million in equity to fund the company’s normal capital expenditure and long-term working capital requirements.

4.23 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	4.23

* These investment figures are indicative

While the company is headquartered in New Delhi, plant sites are located in Aurangabad (Maharashtra) and Vadodra (Gujarat). Both sites are pre-existing and have access to the country’s network of roads and airports and ports.

Development Impact: The project will support the leading manufacturer in their part of the efficiency improvement in the industry. Companies such as Cosmo that become internationally competitive can have a strong positive development impact in the economy through demonstration, leadership and creation of viable and efficient revenue generating assets and better prices to consumers. Cosmo has already taken the lead in upgrading the entire domestic BOPP industry in terms of quality, R&D, productivity and focused customer support. The company is expected to take the lead in the export of high quality BOPP films. Development impacts that will be monitored during supervision include domestic and export sales and earnings before and after income taxes. IFC Role: - Given the paucity of long-term equity investors in India for second-tier, medium-sized companies, equity participation on IFC’s own account would play an important part in mobilizing equity from other international and domestic institutional investors in the long run. Almost all fund managers in India today are only focused on the information technology, business process outsourcing and pharmaceutical sectors. - Cosmo approached IFC for an equity investment realizing IFC’s adherence to high standards of corporate governance as well as to environmental, safety and social consciousness. IFC’s involvement as an equity investor will improve Cosmo’s credibility in the domestic and international market, which will further help the company in attracting quality institutional investors in the long run. - The strong equity base would assist the company in pursuing its long-term growth plans, which in this sector typically require the company to make speedy investments as opportunities arise, whether it be for capacity additions or acquisitions. - IFC’s participation in the project is a continuation of its earlier participation in the expansion project. IFC’s continued support to Cosmo will assist a medium-sized company to grow into a significant international player in the BOPP business. - In line with IFC’s strategy, the project will help a second tier manufacturing company to become an internationally competitive global player.

This is a Category C project according to IFC’s Procedure for Environmental and Social Review of Projects, because it is likely to have minimal or no additional adverse environmental or social impacts. Cosmo Films Ltd. is an existing IFC client, which is in full compliance with all environmental and social requirements and reporting requirements. No additional issues arise with this equity investment, and IFC will continue to supervise this investment under the terms of the existing investment.
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