Super Spinning Mills signs 10-year lease for Hindupur facility with Kyungshin
- Executed 10-year lease with Kyungshin Industrial Motherson for Hindupur property
- Facility to be constructed on built-to-suit basis with 1.93 acres built-up area
- Interest-free security deposit of ₹85,94,411 to be received in two equal tranches
- Lease period commences May 1, 2027, aiming for long-term assured rental income
- No related party transaction; no shareholding held by Super Spinning Mills in lessee
*this image is generated using AI for illustrative purposes only.
Super Spinning Mills Limited has executed a lease agreement with Kyungshin Industrial Motherson Private Limited to construct a new facility at Hindupur, Sri Sathya Sai District. The deal, signed on September 24, 2026, involves a built-to-suit arrangement expected to generate long-term assured rental income.
The agreement covers a property measuring approximately 4.01 acres. The lessee will construct a facility with a built-up area of 1.93 acres on this land. The lease period is set for 10 years, commencing on May 1, 2027. This move is intended to positively impact the company's operational revenue once the lease begins.
Financial Terms and Structure
Under the terms of the agreement, Super Spinning Mills will receive an interest-free refundable security deposit from the lessee. The total advance amount is fixed at ₹85,94,411. The payment structure is split into two equal tranches:
- 50% upon signing of the Lease Agreement
- 50% upon formal handing over of the facility
The company confirmed that it holds no shareholding in Kyungshin Industrial Motherson Private Limited. Furthermore, the transaction does not involve any related party disclosures, as the parties are not related to the promoter or promoter group.
Strategic Implications
The entry into this lease agreement marks a shift towards leveraging idle or underutilized assets for steady cash flow. By opting for a built-to-suit model, the company avoids immediate capital expenditure on construction while securing a long-term tenant commitment. The interest-free nature of the security deposit provides an immediate liquidity boost without associated financing costs.
| Particular | Details |
|---|---|
| Lessee | Kyungshin Industrial Motherson Private Limited |
| Location | Hindupur, Sri Sathya Sai District |
| Land Area | ~4.01 acres |
| Built-up Area | ~1.93 acres |
| Lease Term | 10 years |
| Commencement Date | May 1, 2027 |
| Security Deposit | ₹85,94,411 (Interest-free) |
What the Numbers Show
The disclosed security deposit of ₹85,94,411 represents a significant upfront cash inflow relative to the asset size. Since the deposit is refundable and interest-free, it functions as a zero-cost working capital injection for the company until the lease terminates or is adjusted against rent. The split payment schedule ensures that half the capital is secured immediately at signing, mitigating counterparty risk before construction begins.
Historical Stock Returns for Super Spinning Mills
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +1.06% | +11.68% | +25.41% | +77.91% | -17.83% | -37.30% |
What is the projected annual rental yield relative to the land's market value, and how does it compare to the company's current return on assets?
How might Kyungshin Industrial Motherson's expansion plans in the Hindupur region influence future demand for industrial real estate in Sri Sathya Sai District?
Will Super Spinning Mills pursue similar built-to-suit leases for its remaining underutilized land banks to diversify revenue streams?
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