Project Company: Incorporated in 1986, Craftsman Automation Pvt. Ltd. (Craftsman, the Company) is an engineering company with a diversified business mix encompassing: (i) machining of critical parts for domestic OEMs in the commercial vehicles, tractors segment (ii) contract manufacturing of assemblies and sub assemblies for various sectors like automotive, textiles, printing machines, locomotives for both domestic and export markets, and (iii) manufacture of products such as industrial gears, hoists, marine products. Currently, the Company has three manufacturing units in Coimbatore, and four units that provide machining services at Chennai, Sriperumbudur, Pithampur and Jamshedpur. The Company has a subsidiary in the Netherlands that sells marine products and two joint ventures with: (i) Carl Stahl International Gmbh, Germany, to develop and market material handling equipment (ii) Mitsubishi for selling their laser cutting machines. Major Shareholders: Mr. Srinivasan Ravi owns 75% of the Company and serves as the Managing Director. Two other individuals, Mr. Srinivasan Murali (Mr. Ravi’s brother) owns 15% and Mr. Kaliappa Goundar Gomatheswaran, director of the Company, owns the balance 10%.

The new units and expansions will be spread out over a two year period based on estimated business pipeline and the total cost would be up to $37 million. IFC’s investment will be in the form of straight equity/quasi equity investment in the Company to part finance the Project and to support the growth of the Company.

12.93 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	12.93

* These investment figures are indicative

The new equipment purchased will be used at Craftsman’s existing facilities in India: Coimbatore, Chennai, and Sriperumbudur located in the state of Tamil Nadu in the southern part of India, Pithampur in the state of Madhya Pradesh in central India and Jamshedpur in the state of Jharkhand in the eastern part of India. New units will be set up in strategic locations close to the OEMs and their subsidiaries.

(i) Supporting investment in low income states: Craftsman's investments in Jharkhand and Madhya Pradesh will result in increased employment and enhance the skill sets of local personnel. Further, IFC's investment may have a demonstration effect, encouraging other institutions to invest in these states as well; (ii) Climate change impact: The Company has set up a business that manufactures windmill gears thereby assisting the renewable energy industry; (iii) The Project will result in the creation of around 600 direct jobs and 300 indirect jobs over the next three years; and (iv) Strengthening the corporate governance of the Company through IFC’s advisory services as it prepares to access public markets for further growth.

(i) Providing "patient equity" with a long-term horizon essential for the successful implementation of the Company's strategy; (ii) Working with the Company to establish and maintain a healthy capital structure as it scales up its operations; (iii) Providing global technical expertise to the Company as it grows its business; (iv) Assisting a local company to strengthen its operations and to transition from a closely-held family business to a well-governed corporate entity, leveraging IFC's expertise across corporate governance, environment and insurance, and in the process provide the "stamp of approval" necessary for the Company as it prepares to reach out to a wider set of investors; and (v) Helping attract other potential investors especially during the IPO process. The IPO will in turn give the Company wider access to additional long-term capital to finance its growth strategy.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects because a limited number of specific environmental and social impacts may result that can be avoided or mitigated by adhering to generally recognized performance standards and guidelines.

Environmental and social impacts associated with this project include: environmental and social management systems; HR policies and practices - including those for contract labor; management of occupational health and safety; resource consumption (water, energy); management of air emissions and liquid effluent discharges; solid and hazardous waste minimization and management; emergency management plans and community engagement, safety and security.

Further details on the potential environmental and social impacts of the project, corresponding mitigation measures and guidance on how and where information about the project can be obtained are provided in the IFC Environmental & Social Review Summary and Environmental & Social Action Plan.