TEV Studies for Agri Projects in India — The Complete Reference Guide

A Techno-Economic Viability (TEV) study is the independent assessment of a project's technical feasibility, commercial viability, and financial robustness, prepared for the lending bank's risk committee. For most public-sector banks, a TEV from an empanelled agency is mandatory for project finance above ₹10 Cr.^[1] In agri-projects — food processing, dairy, cold chain, warehousing, farm machinery manufacturing — TEV is the hinge document between the promoter's operating plan and the bank's sanction letter.

This guide is the full reference. It is written to be used by promoters and CFOs preparing for sanction, and by project-finance teams commissioning TEV work. The structure mirrors what a bank risk committee will actually look for.

1. What a TEV is (and what it is not)

A TEV is:

• An independent assessment — the TEV agency should have no financial interest in whether the project proceeds.
• A bankable assessment — written for the lender's risk committee, not for promoter communication or investor pitching.
• A structured document — following a format banks have settled on through decades of practice.
• Based on primary work — rebuilds capacity, commercial sizing, and financials from first principles, not from the promoter's deck.

A TEV is not:

• A DPR (Detailed Project Report) — the DPR is the promoter's document; the TEV references and tests it.
• A valuation — a TEV does not opine on equity value, only on project viability for lending.
• A feasibility study in the early-stage sense — TEV is a late-stage document, after fundamental feasibility has been established.

2. When TEV is mandatory

For most PSU banks and major private banks, a TEV is mandatory for:

• Project finance above ₹10 Cr for a greenfield project.
• Expansion / brownfield projects with incremental term-loan above ₹10 Cr.
• Technology or capacity-upgrade loans above the threshold.
• Restructuring or re-assessment of stressed accounts (often a different TEV format).

SBI, India's largest bank, requires the TEV from an empanelled agency under its published guidelines. Other PSU banks have similar policies, and consortium lending generally defaults to the lead bank's panel.^[1]

3. Empanelment — the gate before the gate

Each bank maintains a list of empanelled TEV agencies. An agency not on the bank's panel cannot submit a TEV to that bank for a new project — the report is treated as informational but not as the formal bank TEV.

Typical empanelment criteria at a large PSU bank:^[2]

• Minimum average annual revenue of ₹100 lac over the last three years.
• Minimum track record in project appraisal, commonly 5-10 years.
• Sector-specific experience — an agency empanelled in, say, food processing may not be empanelled in farm-machinery manufacturing.
• Maximum number of sectors per agency — SBI's policy caps an agency at 3 sectors; other banks have their own caps.

Practical implications:

1. Check the panel before commissioning the TEV. The single most expensive mistake in TEV commissioning is starting with a non-empanelled agency for the lead bank.
2. Consortium lending needs TEV acceptable to all members. Most banks accept each other's empanelled agencies; not all.
3. Sector scope matters. Dairy, cold chain, and food processing are often separately empanelled; agri-machinery and agri-inputs are usually separate categories.

4. Who should prepare and review a TEV

The TEV agency should:

• Be empanelled with the lead bank of the financing consortium.
• Have sector-specific experience, not just generic industry experience.
• Be led by partners with prior banking and prior industry experience — not purely audit-firm generalists.
• Have the bandwidth to deliver the report in the window required by the promoter and the bank.

The promoter's side should:

• Appoint a named TEV coordinator (typically CFO or head of corporate development) who owns the interface with the agency and the bank.
• Provide primary data — operating history, commercial contracts, equipment quotes — in structured form.
• Be ready to answer technical, commercial, and financial questions through the engagement cycle.

5. Report structure — what a bank-format TEV contains

A bank-format agri-project TEV typically runs 80-120 pages including appendices, organised as:

Section	What it covers	Typical length
Executive summary	One-page lead with the three risk-committee questions answered upfront	2-4 pages
Promoter profile and track record	Management team, group companies, prior project performance	4-6 pages
Project overview	Scope, location, capacity, phasing, technology	6-8 pages
Market and commercial assessment	Bottom-up demand sizing, named buyer evidence, channel design, pricing	10-15 pages
Technical assessment	Capacity rebuild, equipment BOM validation, site suitability, utilities, environmental clearances	15-20 pages
Financial exhibits	Base, upside, and downside scenarios with DSCR/IRR bands, working-capital sensitivity	15-20 pages
Risk matrix	Named risks with specific mitigants, monetised where possible	6-8 pages
Sensitivity analysis	Key variable stress tests — input costs, realisation, ramp delay, commodity cycle	4-6 pages
Conclusions and recommendations	Go/no-go assessment, conditions precedent, covenant recommendations	3-4 pages
Appendices	Detailed financial model tabulations, technical drawings, contract summaries	15-25 pages

6. The three questions a risk committee is actually asking

Every section of a TEV is either helping the committee answer one of these three questions, or it is decoration.

Question 1 — Is the demand real and sized correctly?

• Bottom-up sizing, not sector-CAGR-times-share.
• Named anchor buyers, with LoIs or existing relationships as evidence.
• Comparable-project ramp curves, not wishful thinking.

Question 2 — Is the capex right-sized and the project executable?

• Capacity rebuilt from line balance and SKU mix.
• Vendor quotes benchmarked against alternatives.
• Tropicalisation and India-specific cost adders surfaced.
• Utilisation assumptions grounded in sector-comparable evidence.

Question 3 — What happens in the downside?

• Base, upside, and downside scenarios with DSCR > 1.2× sustained through the downside.
• Working-capital peak sensitivity at kharif and rabi end.
• Single-buyer concentration risk surfaced and priced.
• Input-commodity stress modelled at credible bounds.

A banker's line-by-line checklist — what the risk committee actually reads

A TEV lands on a bank risk-committee agenda as one of 20-40 items in a meeting. The lead reviewer has 20-30 minutes with the report before the meeting. The committee's pattern-recognition against TEVs is well-developed. A short checklist of what they check — and in what order:

Executive summary (page 1-3). Does the exec summary lead with the three risk questions — is demand real, is capex right-sized, what happens in downside — or with promoter narrative? Top reviewers begin with the exec summary and use it to decide where to drill into the body.

Promoter section (page 4-8). Do promoter financials stand up? Has the DGM-grade reviewer flagged any group-company stressed-account issues? Has the promoter's prior-project track record been analysed against industry comparable?

Demand assumptions (page 10-20). Is the market sizing bottom-up or top-down? Are anchor-buyer commitments evidenced (LoIs, MoUs, offtake agreements, dispatch history)? Does the commercial assessment name comparable projects and their ramp curves?

Technical and capex assessment (page 22-35). Has the TEV agency rebuilt capacity from first principles — line balance, SKU mix, utilisation — or just signed off on the promoter's DPR? Has the equipment BOM been benchmarked against alternative vendors? Are tropicalisation and India-specific cost adders surfaced?

Financial exhibits (page 38-55). Are base, upside, and at least one named downside case presented? Are scenario-specific DSCR and IRR bands shown? Is working-capital sensitivity present and separately analysed from EBITDA sensitivity?

Risk matrix and mitigants (page 58-65). Are 5-7 named risks with specific (not generic) mitigants presented? Are mitigants monetised where possible? Is the environmental/social/regulatory compliance picture surfaced?

Conclusions and covenant recommendations (page 70-75). Does the TEV recommend specific covenants or conditions precedent? Is the go/no-go assessment unambiguous?

Appendices. For serious drill-down: the detailed financial model tabulations, the technical drawings, the contract summaries, the primary-research notes from anchor-buyer interviews. Where the exec summary and the committee had questions, the lead reviewer jumps to appendix for evidence.

A well-written TEV is designed for exactly this reading pattern — one-page-answer-per-question in the executive summary, progressively deeper evidence as the reader drills down. A TEV designed for promoter reading gets sent back.

7. Scenario design — the craft of downside

Downside scenarios are where TEV-craft distinguishes a strong report from a weak one. The weak pattern: one base case with a -10 percent revenue sensitivity tagged as "downside."

The strong pattern: two or three named downside scenarios, each built around a specific trigger:

1. Input-cost stress — commodity price rises to the upper decile of the last 36 months.
2. Ramp delay — primary sales ramp lags base by 6 months; full capacity reached 12 months later.
3. Large-buyer concentration — top 1 or 2 buyers reduce offtake by 30 percent; project must absorb.
4. Working-capital peak breach — seasonal peak exceeds sanctioned working-capital limit; additional ad-hoc funding requirement.
5. Monsoon shock (for agri-input-dependent processors) — kharif monsoon 15 percent below normal, commodity prices up, processor input costs up, commodity-linked realisation down.

Each scenario should have a named DSCR trajectory across the tenor of the loan. The risk committee is looking for DSCR > 1.2× sustained; below that, they expect explicit mitigants.

8. Common TEV failure patterns

9. The engagement calendar

A clean agri-processing TEV runs 4-8 weeks from engagement to final report. A realistic week-by-week:

• Week 1 — Kickoff, data-request-list issued, promoter-side coordinator appointed.
• Week 2 — First site visit. Promoter-side data collection. Bank briefing (optional).
• Week 3-4 — Market and commercial assessment — primary interviews with 3-5 anchor buyers and distributors; competitor benchmark work.
• Week 4-5 — Technical assessment — capacity rebuild, vendor quote validation, site suitability.
• Week 5-6 — Financial modelling — base, upside, downside scenarios; sensitivity runs; working-capital sensitivity.
• Week 6-7 — Draft report shared with promoter for factual review.
• Week 7 — Response to promoter comments, final report prepared.
• Week 8 — Final report submitted to bank through promoter's application.

Complex multi-site or hybrid processing-plus-cold-chain projects can extend to 10-12 weeks.

Three worked project-archetype templates

Different agri-project types need different TEV templates. Three worked examples:

Template A — Food processing plant (₹150 Cr capex, greenfield).

• Demand: SKU-level bottom-up for the 3-6 core SKUs; anchor-buyer validation with 2-3 modern-trade and institutional buyers; export market sizing if relevant.
• Capacity: line-balance rebuild by shift, SKU mix by month, utilisation ramp explicitly tied to comparable-project evidence.
• Capex: BOM at line-item level with vendor benchmarks; tropicalisation line (utilities, dust control, ambient handling, power-reliability upgrades); contingency at 5-8% of hard cost.
• Financials: base case assumes utilisation reaches 60-65% by year 3; downside-1 assumes 45% utilisation through year 2; downside-2 assumes 10% input-cost stress with price pass-through lag.
• DSCR benchmark: >1.3x base, >1.15x downside-1, >1.05x downside-2.
• Working capital: peak at quarter-end, 120-150 days of cost-of-goods; seasonal receivable peak with modern-trade buyers.
• Risks: buyer-concentration (if top-2 buyers >50% of volume), input-commodity volatility, MFI/NBFC competition for working-capital share.

Template B — Multi-site cold-chain plus warehousing (₹120 Cr capex, three-site).

• Demand: occupancy split by anchor (contracted tenancy) vs spot; named anchor tenants with minimum-guarantee obligations; rate-per-pallet benchmarking against WDRA regional data where relevant.
• Capacity: pallet capacity by site, seasonal occupancy peaks, truck-dock throughput.
• Capex: cold-room insulation quality, refrigeration-unit specifications and energy efficiency, power reliability infrastructure (gensets, UPS for critical monitoring).
• Financials: base case assumes 75% anchor + 20% spot + 5% buffer by year 3; downside-1 assumes 55% anchor + 30% spot; downside-2 assumes utility tariff increase at 10% annually.
• DSCR benchmark: >1.25x base, >1.1x downside-1.
• PMKSY / MIDH eligibility: if claimed, verify against current operational guidelines and assess implementation risk of subsidy disbursement.
• Risks: anchor-tenant concentration, power-tariff volatility, location-specific ingress/egress regulatory issues.

Template C — FPO aggregation and primary-processing centre (₹15 Cr capex, NABARD-backed).

• Demand: member-farmer procurement commitment (non-binding but quantified), anchor buyer offtake commitments (signed MoUs preferred), seasonal aggregation volume peaks.
• Capacity: aggregation, cleaning, grading, drying, packaging capacity by commodity; primary-processing extension if relevant.
• Capex: modular equipment sizing, power and water infrastructure, farmer-convenience infrastructure (weighing, holding).
• Financials: base case assumes full equity tranche from 10,000 FPO scheme plus NABARD term-loan leverage; downside-1 assumes 25% lower aggregation volume; break-even orientation rather than IRR orientation.
• DSCR benchmark: >1.15x sustained.
• Risks: member-farmer retention, commodity-price volatility (particularly on the procurement side if FPO is buying at agreed rates), anchor-buyer offtake stability, governance capacity of the FPO.
• Specific items the TEV should address: the FPO's CEO or business-manager track record, the member-farmer engagement rhythm, the credit-guarantee coverage status, and the scheme-supported handholding (5-year support from the implementing agency).

Each template reflects what the respective risk committee actually cares about for that sub-sector. A generic template forced onto a specific archetype produces a report that skips the questions that matter.

10. TEV for specific agri sub-sectors — what differs

Food processing

Biggest swing factors: SKU mix, utilisation, anchor-buyer concentration, cold-chain interface. The bank wants to see named modern-trade buyers validated, not just volume assumptions.

Dairy

Biggest swing factors: milk procurement assurance (cooperative vs direct vs farmer tie-ups), seasonality of milk availability, product mix (liquid vs cheese vs butter vs milk powder — each has distinct economics), NDDB-benchmark yield and cost data.^[3]

Cold chain and warehousing

Biggest swing factors: occupancy assumptions, customer mix (anchor vs spot), location economics, PMKSY / MIDH subsidy eligibility if claimed.

Farm-machinery manufacturing

Biggest swing factors: CMVR/FMTII homologation calendar alignment with commercial ramp, component-supply economics, dealer-network build assumptions.

Warehousing (scientific / modern)

Biggest swing factors: NABARD Warehouse Infrastructure Fund participation, WDRA registration economics, customer base assumptions.

Post-disbursement covenants — what the TEV feeds into

TEVs feed into the final sanction terms, and thoughtful TEVs anticipate the covenants that will be negotiated. Covenants routinely derived from TEV analysis:

Financial covenants. Minimum DSCR (usually >1.2x), maximum TOL/TNW, minimum net-working-capital, profitability covenants. The TEV's scenario analysis directly informs where these are set. A TEV that models tight DSCR in downside feeds into tight financial covenants; a TEV that shows wider DSCR buffer allows looser covenants.

Operational covenants. Minimum utilisation thresholds, anchor-buyer retention, specific capex commitments, timelines for commissioning. The TEV's operational assumptions become the covenant basis.

Reporting covenants. Quarterly operational dashboards, annual audited financials, event-driven reporting (board changes, significant litigation, covenant-breach risk). The TEV's risk matrix informs what the bank wants to monitor.

Drawdown conditions. Tranche-based drawdown tied to milestone achievement — capex-completion percentage, commissioning achievement, capacity-utilisation thresholds. The TEV's execution timeline becomes the basis.

A TEV that surfaces realistic execution risks and proposes appropriate monitoring pre-empts 2-3 months of post-sanction covenant negotiation. Banks appreciate TEVs that make the covenant structure easier to write.

11. What a sanction-ready TEV reads like

A TEV that will sanction in two committee cycles:

• Executive summary leads with the three risk-committee questions and answers them in one page each.
• Demand built bottom-up with named anchor buyers and comparable-project benchmarks.
• Technical rebuilt from first principles, not promoter-sign-off.
• Base, upside, two downside scenarios with DSCR bands.
• Risk matrix with 5-7 named risks, each with specific mitigants.
• Working-capital sensitivity across the seasonal cycle.
• Environmental, social, and regulatory compliance surfaced explicitly.

The report is typically 80-120 pages including appendices. Shorter is usually under-supported; longer is usually padding the committee will skim past.

Selecting a TEV agency — a checklist

Empanelment status is necessary but not sufficient. A good TEV agency also has:

Sector-specific operating experience among lead partners. A TEV for a dairy project needs lead-partner depth on milk procurement, NDDB benchmarks, and dairy product-mix economics. A TEV for a cold-chain project needs lead-partner depth on WDRA-regulated warehousing, PMKSY-eligible cold-chain design, and occupancy-based revenue models. Credentials on the website are not a substitute for ex-banker or ex-industry CVs of the named lead partner.

Capacity to deliver in the required window. A quality TEV for a mid-size agri-processing project is 4-8 weeks of work for a dedicated 2-3 person team. Agencies that are sold out 3 months ahead on lead-partner calendars will either stretch the timeline or sub-delegate — both outcomes degrade the quality of what the risk committee sees.

Willingness to push back on promoter assumptions. The agency's independence is the bank's protection. An agency that signs off promoter assumptions without independent verification is not delivering TEV value; it is delivering a DPR review. Ask the agency upfront: "what do you do when you disagree with the promoter?" Good answers are about structured conversation with promoter and bank; weak answers deflect.

Clarity on scope, fee, and deliverables. A TEV engagement letter should specify the scope of work, the number of site visits, the number of primary-interview anchor-buyer calls, the number of scenarios, the delivery timeline, and the post-submission support (handling of risk-committee questions, conditions-precedent framing). Engagement letters that are vague on any of these produce friction downstream.

Post-sanction support willingness. Banks often come back 6-12 weeks post-submission with clarifications or additional-analysis requests from the risk committee. A good agency includes 4-8 hours of post-submission support in the original fee; weaker agencies bill separately and slow the sanction.

A strong TEV agency for an agri-project engagement lands you 95 percent of the way to clean sanction. A weak TEV forces you to spend 15-25 percent of engagement budget on rework and re-response.

Preparing the promoter's data room for a TEV engagement

How quickly a TEV moves from engagement to final report is driven primarily by how well the promoter's data room is organised. A prepared data room typically lets the TEV agency start substantive work from week 1; an unprepared one consumes 2-3 weeks at the front of the engagement simply to assemble material.

A TEV-ready data room should include, minimum:

• Corporate. Memorandum and articles, board resolutions authorising the project, latest 3 years audited financials, latest management accounts, credit rating reports if applicable, existing banking arrangements and limit documentation.
• Commercial. Customer contracts and LoIs, distributor agreements, export credentials (if relevant), pricing history, recent order book and pipeline detail, competitor benchmarking from the promoter's side.
• Technical. Site acquisition and title documents, layout drawings, vendor quotes with proof of negotiation (not just first quotes), permits received and pending (environmental, municipal, pollution-control, factory licence), technology licence agreements.
• Project execution. Implementation schedule with named milestones, contractor selection (if applicable) and contracts, supervising consultant arrangements, risk register from promoter's perspective.
• Financial model. The promoter's own model with assumptions documented, historical costs, projections methodology, scenario logic if any.

Promoters who organise the data room this way before the engagement start save 2-4 weeks of calendar. Promoters who provide material in response to each TEV agency request stretch the engagement to its upper bound. The data-room investment is at most a week of promoter-side effort and usually less.

12. How AgPro's TEV practice works

AgPro's TEV practice is built by ex-banker and ex-industry hands, not by audit-firm generalists. Our working mode:

• Empanelled with leading PSU banks in relevant agri sub-sectors.
• A named lead partner on each engagement with prior banking or prior industry experience in the sub-sector.
• A rebuild-from-first-principles approach, not promoter-sign-off.
• Pre-answer the three risk-committee questions in the executive summary.
• Sanction-support through first committee cycle included — we stay on the engagement until sanction, not just report submission.

Sanction timelines on our recent agri-TEV work average two committee cycles.

Explore our TEV Studies practice →

Frequently asked questions

What is the threshold above which TEV is mandatory?

Most public-sector banks require a TEV from an empanelled agency for project finance above ₹10 Cr. The threshold can be stricter in consortium lending and may differ for specific loan products; always verify with the lead bank at the point of sanction.

How long does a TEV take?

Can a non-empanelled agency submit a TEV?

How many scenarios should the financials cover?

What is the difference between TEV and LIE?

Who pays for the TEV?

How does TEV differ by agri sub-sector?

How long should the executive summary of a TEV be?

What's the right DSCR benchmark for agri processing?

Can a TEV recommend covenant relaxation?

How do I handle a project where the anchor buyer is also the promoter's group company?

Sources & references(9), 9 items

Written by

Devendra K Jha· Director, AgPro Consulting

Founding Director of AgPro Consulting. Agricultural engineer with 28+ years across agri inputs, mechanization, and enterprise leadership roles.

• B.Tech Agricultural Engineering
• 28+ years agri-enterprise leadership

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