GrowIT.in Nagpur

Looking for space to set up an IT company at Nagpur? Well, add to your preferred list of locations a new destination.

SP Infocity at MIHAN, is the new offering of the construction major Shapoorji Pallonji for the IT Industry at Nagpur. To understand what MIHAN and the SP Infocity Project have to offer, we did a comprehensive and exclusive email interview with Mr.Rajeev K. Shete, the Vice-President - Commercial Sales & Marketing of SP Infocity project at Nagpur.  

NOTE: The interview is detailed as we wanted to cover as many factual inputs as available for potential company to get their location selection decision right.

Shapoorji Pallonji - industry pioneer with 146 years of construction experience - is building a world-class IT/ITES Park in MIHAN, Nagpur. SP INFOCITY, Nagpur is an exciting and a very promising development for IT industry at Nagpur. Here is what we unearthed:

growIT.in: SP Infocity in Nagpur is an interesting prospect for Nagpur IT Industry. Can you tell me more about the facilities available at SP Infocity, Nagpur?

SP Infocity Nagpur is a notified SEZ of 100 acres. The total planned development in this project is approximately 7.7 Million square feet that will be spread across 24 buildings. Currently, one building (Building A1) and an incubation centre are ready for leasing and comprise a total area of approximately 2.5 Lakh square feet. The project as of date has the following key advantages:

• Large and flexible floor plates of approximately 50,000 square feet
• 200 seater incubation facility
• Option of warm shell and fully fitted premises
• National Building Code (NBC) and Ministry of Environment & Forests (MOEF) compliant development
• Proposed clubhouse with gym, swimming pool, games, Jacuzzi, steam etc.
• Proposed day care centre, utility rooms

Being situated in the MIHAN SEZ, SP Infocity Nagpur can avail of the following key advantages of the MIHAN project:

• Accessible location; MIHAN is situated 6 kms. from the airport and 10 kms. from the CBD
• Boeing is investing in MRO facility that will serve as anchor for supporting businesses to set up operations in the region, thus establishing MIHAN as a thriving commercial hub
• Uninterrupted power provision at Rs.3/unit (through captive power plant), which is more than 50% cheaper than industrial power. The following table illustrates the savings on power cost that a company operating in MIHAN can enjoy vis a vis power costs in other major IT hubs around India:

We also did some research on relative savings in living costs that can be availed of by working professionals in Nagpur. The following table depicts savings in housing costs in Nagpur relative to Bengaluru, Hyderabad and Pune.

• World class infrastructure in terms of roads, water supply and sewage & storm water drainage
• Smart telecom connectivity options provided by BSNL, Tata and Reliance
• Full service hospital spread over 40 hectares is currently under development
• 3 residential townships located within 3 kms. of MIHAN project; 1 mass housing development located within MIHAN premises

growIT.in: SP Infocity is an IT/ITES SEZ. What benefits (tax and infrastructure) would a company in this IT Park enjoy?

In terms of income tax benefits, SEZ unit lessees can avail of benefits in the following manner:

However, if Letter of Approval (LOA) for establishing a unit in SEZ is obtained after 31st March, 2014, then income tax benefits will be investment linked (i.e. income tax exemption available only until capital investment incurred in setting up a unit has been completely recovered)

Unit lessees in SEZs can avail of the following indirect tax benefits:

• Supplies from Domestic Tariff Area (DTA) to SEZ are treated as exports and are eligible for export incentives
• Excise duty Exemption
• Customs duty Exemption
• CST exemption
• Service tax exemption/refund
• Electricity Duty Exemption (subject to developer approval from State Electricity Board)
• 100% exemption of VAT payable on purchase of materials/supplies

The following indirect taxes are non-exempt and have to be incurred by unit lessees in SEZs:

• Stamp Duty exemption currently not approved by Govt. of Maharashtra; waiver expected shortly
• MAT of 18.5% of book profits payable from April 1, 2012
• Dividend Distribution Tax of 15% payable

growIT.in:  What types of companies will benefit most from these tax sops? Are you looking to target companies of specific size or area of operation?

Broadly speaking, since this is an IT/ITES SEZ, the companies operating out of this site need to be:

• Operating in the IT/ITES domain
• Must have export operations and be net foreign exchange positive

Without the above 2 conditions being satisfied, it would not be possible to obtain a Letter of Approval (LOA) from the SEZ Board of Approval (BOA). As long as the above criteria are satisfied, we would be willing to enter into a lease agreement with any company. Our SEZs and IT parks around India are proudly associated with marquee brands, some of which are as follows:

• Accenture
• ADP
• Amazon
• Aptara
• Honeywell
• HSBC
• IBM
• Nokia
• Siemens
• Syntel

We are proud of the diversity of companies that are associated with us, and look forward to continuing this feature with SP Infocity Nagpur.

growIT.in: What is the status of construction at SP Infocity, Nagpur? How soon can a company move in? 

Currently, approximately 2.5 Lakh square feet of space is ready for fit outs and leasing at SP Infocity Nagpur. This comprises 2.3 Lakh square feet of Building A1 and approximately 20,000 square feet of incubation space. The incubation space can accommodate up to 200 seats. Presently, negotiations are underway with a few interested parties.

growIT.in: After constructing IT Parks in cities like Pune, Mohali, Chennai, Gurgaon, why has Shapoorji Pallonji chosen Nagpur to build an IT/ITES SEZ?What promise do you see for Nagpur IT Industry?

Nagpur was chosen by us to set up an IT/ITES SEZ because of its attractiveness as a destination to live and set-up business in. Some of the key advantages of the city from a liveability perspective are as follows:

• Central location and excellent connectivity by air, rail and road
• Excellent internal infrastructure in terms of road networks; this results in reduced traffic congestion
• Excellent power and telecommunications infrastructure ;the city is a hub for power generation and enjoys telecom connectivity through multiple independent service providers
• Very low crime rates, both in terms of overall crime and crime against women
• Very low probability of natural and man-made (terrorism and politics related) disasters

From an IT/ITES perspective, Nagpur will always represent an attractive base for companies because of the quantum and quality of engineering institutes in the city. Approximately 12,000 students graduate from more than 50 engineering colleges around the city, and all leading IT companies are known to recruit from premier institutes like VNIT and IMT. We believe that this large base of prospective IT/ITES employees in Nagpur can mitigate attrition concerns companies may have about Nagpur as companies will be able to recruit a high percentage of quality, Nagpur-based resources.

Cost savings is a big advantage Nagpur has over other IT/ITES destinations. Nagpur entails critical cost advantages for both employers and employees when compared to the major IT hubs of Bengaluru, Hyderabad and Pune. As per our research, as the following table shows, Nagpur represents cost savings for companies in terms of wages. The wages depicted in the table represent median monthly wage for an IT/ITESprofeessionals.

We also did some research on relative savings in living costs that can be availed of by working professionals in Nagpur. The following table depicts savings in housing costs in Nagpur relative to Bengaluru, Hyderabad and Pune.

In addition to housing expenses, day to day living in Nagpur is also significantly cheaper. The following research, which compares prices of essential and discretionary spending heads in Nagpur vis a vis other IT hubs, illustrates the relative savings in living expenses that can be availed of in Nagpur.

growIT.in: Sounds great! How can interested companies explore this opportunity further?

For further details about the project and leasing enquiries, please contact:

In addition to this, you can learn more about SP Infocity Nagpur and other projects in our real estate portfolio through our website, www.sprealestate.in.

growIT.in: Thanks a lot for sharing valuable information on the SP Infocity Project. We wish you all the best.

Readers, if you are planning to set up your shop in Nagpur, then you can also post a business enquiry with growIT.in and we will be happy to assist you. In addition, use  the comment box below to share your thoughts.