What is a soft gelatin capsules project report?
A soft gelatin capsules project report is a detailed project report (DPR) for a plant that seals oils, liquids and suspensions inside a one-piece gelatin shell. It sets out the encapsulation process, machinery, GMP facility, raw materials, project cost, means of finance, five-year projections, DSCR and break-even for a lender or investor.
Pharma and nutraceutical entrepreneurs use it to size the plant and raise a term loan; banks use it to judge whether contract and own-brand orders can repay the debt.
Also known as: softgel capsule project report, softgel manufacturing plant DPR, soft gel capsule business plan, project report on soft gelatin capsules.
Soft gelatin capsules manufacturing plant cost in India
Our sample report models a plant making 3,30,000 capsules per day over 300 working days, starting at 60% of capacity and reaching 80% in Year 5. Capsules are priced at ₹1.41 each ex-factory, an average across common vitamin, oil and prescription fills.
As an indicative guide, a single encapsulation line in leased premises starts around ₹2.5–4 crore. A plant with two or three lines, its own building and a facility built for WHO-GMP export audits can need ₹8–20 crore.
| Land and site development | 32.77 |
|---|---|
| Building and civil works | 167.09 |
| Plant and machinery | 235.90 |
| Other fixed assets (electrification, furniture, lab equipment, DG set) | 49.59 |
| Contingencies | 20.15 |
| Preliminary and pre-operative | 12.64 |
| Working capital margin | 46.69 |
| Total | 564.83 |
| Promoter's contribution (25%) | 141.21 |
|---|---|
| Term loan from bank (75%) | 423.62 |
| Cash credit limit (separate) | 140.07 |
| Total project cost | 564.83 |
Term loan at 10.5% with a 6-month moratorium and 54 monthly instalments. Sample figures are illustrative; the wider ranges are indicative.
Soft gelatin capsules manufacturing process
A softgel is formed, filled and sealed in one continuous step on a rotary die machine. Drying then takes longer than encapsulation, so the drying room often sets the real output of the plant.
- Gel mass preparation
Gelatin, glycerin or sorbitol and purified water are melted under vacuum in a jacketed tank. Removing air bubbles here prevents weak seams later.
- Fill preparation
The active ingredient is dissolved or suspended in an oil carrier and passed through a colloid mill. Fills should stay liquid below about 35°C and carry little water, or they soften the shell.
- Encapsulation
The gel mass is cast on cooling drums into two ribbons about 0.6–1.1 mm thick. A metering pump injects the fill between them as the rotary dies seal and cut each capsule.
- Tumble drying
Fresh capsules pass through tumble dryers, rotating drums with blown air that remove surface moisture and stop the soft capsules from sticking together.
- Tray drying
Capsules then rest on trays for one to two days at about 20–30°C and 20–30% relative humidity until the shell is firm enough to pack.
- Washing, inspection and packing
The lubricating oil is washed off and leakers and misshapen capsules are sorted out. Batches are tested for fill weight and disintegration, then packed in blisters or bottles.
Gelatin shell or plant-based shell?
Most Indian softgel units run gelatin shells. Some add a vegetarian line using starch and carrageenan shells, mainly for nutraceutical brands that sell to vegetarian buyers.
| Point | Gelatin shell | Plant-based shell |
|---|---|---|
| Shell material | Bovine, porcine or fish gelatin with glycerin or sorbitol | Modified starch and carrageenan with a plasticiser |
| Main buyers | Prescription medicines, vitamins, omega 3 | Vegetarian and export nutraceutical brands |
| Machine | Standard rotary die encapsulation machine | Rotary die machine with changed heating and ribbon settings; trials needed |
| Shell cost | Lower, with well established supply | Higher, with fewer shell material suppliers |
Check the fill first: very water-rich, strongly acidic or alkaline fills react with gelatin and can harden or leak over time. Run a short stability trial on each new fill before you quote a contract price.
Raw materials for soft gelatin capsules
The fill drives raw material cost, not the shell. In our sample, raw materials come to ₹326.23 lakh in Year 3, about 33.4% of sales. Packing adds another 9.5% of sales, because most softgels leave the plant in blisters or bottles.
| Raw material | Share of cost | Year 3 (₹ lakh) |
|---|---|---|
| Fill actives and carrier oils | 58% | 189.21 |
| Pharmaceutical grade gelatin | 27% | 88.08 |
| Glycerin and sorbitol | 9% | 29.36 |
| Colours, opacifier and preservatives | 3% | 9.79 |
| Ribbon lubricant oil | 3% | 9.79 |
| Total | 100% | 326.23 |
On loan licence work the customer often supplies the active ingredient, which lowers your raw material bill and your selling price together.
Machinery for a softgel plant
The rotary die encapsulation machine is the heart of the plant and the largest single cost. The HVAC system and drying room cost as much as some process machines, because softgels are sensitive to humidity at every stage.
| Machine | What it does | Sample cost (₹ lakh) |
|---|---|---|
| Rotary die softgel encapsulation machine | Forms ribbons, injects fill, seals and cuts capsules | 82.57 |
| Gelatin melting tank with vacuum system | Makes bubble-free gel mass | 23.59 |
| Fill mixing tank and colloid mill | Blends and mills the fill | 18.87 |
| Tumble dryers | Remove surface moisture from fresh capsules | 18.87 |
| Drying room with dehumidifiers and trays | Dries capsules to a firm shell | 21.23 |
| Capsule inspection and sorting machine | Rejects leakers and misshapes | 11.80 |
| Blister packing machine | Packs capsules in strips | 18.87 |
| HVAC and clean room | Controls air quality, temperature and humidity | 23.59 |
| Quality control laboratory instruments | Tests raw materials, fill content and finished batches | 16.51 |
| Total plant and machinery | 235.90 | |
Costs are the sample report's estimates. Die sets for each capsule size and shape are extra; get current quotations before you finalise.
Utilities, drying conditions and manpower
Power is a small cost in a softgel plant. Humidity control, purified water and trained operators matter far more to output and rejects.
| Drying room | About 20–30°C and 20–30% relative humidity, with enough tray space for one to two days of output |
|---|---|
| Purified water | Needed for gel mass and equipment cleaning; the water system is part of the GMP inspection |
| Power and fuel | ₹19.72 lakh in Year 3 in our sample, about 2% of sales; a DG set is included in other fixed assets |
| Manpower | 36 people in our sample: 5 in management and administration, 13 skilled operators and 18 semi-skilled workers |
| Wage bill | ₹89.88 lakh in Year 1, rising 5% a year |
| Working capital | ₹186.76 lakh in Year 1; customer credit of 60 days is the largest part |
Licences and GMP approvals for a softgel plant
Approvals decide your launch date. Plan the building around Schedule M from the first drawing, because changing a finished shed to meet GMP is slow and costly.
| Drug manufacturing licence | From the State Licensing Authority under the Drugs Rules, 1945, for each product made as a medicine |
|---|---|
| Revised Schedule M (GMP) | Notified on 28 December 2023 (G.S.R. 922(E)). The extension for small and medium makers ran to 31 December 2025, so a new plant must comply from the start |
| FSSAI licence | For softgels sold as health supplements or nutraceuticals; the 2022 nutraceutical regulations allow capsule formats |
| GST | Drugs and medicines moved from 12% to 5% GST from 22 September 2025; supplements are classified separately |
| Pollution board consent | Consent to establish and operate from the State Pollution Control Board; confirm the category with your state board |
| Business registrations | Udyam and GST registration, factory licence and fire NOC as your state requires |
Rules checked October 2026. Confirm current requirements with the State Drugs Control Department before you apply.
Who buys soft gelatin capsules?
Softgels carry fills that do not suit tablets, such as vitamin E, vitamin D3, omega 3 fish oil, lycopene and many oily prescription drugs. Prescription volumes are steady, while nutraceutical demand grows with online and pharmacy sales of supplements.
Most new units earn first from third-party and loan licence manufacturing, then add their own brands once the plant has a track record.
- Pharma marketing companies on third-party or loan licence
- Nutraceutical and health supplement brands
- Larger pharma manufacturers outsourcing softgels
- Hospital and government tenders
- Distributors and export customers
What wins repeat orders: contract buyers audit your plant before the first order and check fill weight and leak rates on every batch. A clean audit record matters more than a slightly lower price per capsule.
Mistakes that weaken a soft gelatin capsules project report
- Sizing output on the encapsulation machine alone
Capsules spend a day or two in the drying room. If tray space is short, the machine stands idle and planned sales never happen.
- Costing gelatin on shell weight only
The ribbon left after the dies cut the capsules is a large share of the gel mass and is often scrapped. Gelatin use must be costed on ribbon consumed.
- Using MRP instead of contract prices
Third-party rates per capsule are far below the retail price of a strip. Revenue based on MRP overstates DSCR and fails a bank's check.
- Leaving out GMP running costs
HVAC power, stability studies, validation and QC staff are ongoing costs under Schedule M, not one-time setup items.
- Assuming orders without buyer letters
Lenders want letters of intent or supply agreements from marketing companies before they accept the utilisation you project.
How NPCS helps you set up a softgel plant
- Capacity and product mixSize encapsulation lines and drying space for your fills, capsule sizes and contract pipeline.
- GMP-ready layoutPlant layout, HVAC zoning and utility list planned around revised Schedule M.
- Bank-ready project reportProjections, DSCR and working capital in the format your lender wants.
- Machinery and approvalsCompare encapsulation machine suppliers and map the drug licence and FSSAI steps for your state.
NPCS's published client list includes 2 assignments for soft gelatin capsule projects, and NPCS has prepared project reports for pharmaceutical and chemical units since 1994.
What's inside the soft gelatin capsules sample report
- Introduction
- Uses and applications
- Market potential
- Manufacturing process
- Raw materials
- Plant and machinery
- Land, building and utilities
- Manpower
- Licences and approvals
- Project cost and means of finance
- Working capital
- Projected profitability
- Cash flow statement
- Projected balance sheet
- Depreciation
- Term loan repayment
- Debt service coverage
- Break-even analysis
- Financial ratios
- Key assumptions
- Conclusion
- Monthly loan repayment schedule
18 pages, five-year projections, illustrative figures.
Open sample reportFree sample or a report for your project?
| What you get | Free sample | NPCS report for your project |
|---|---|---|
| Capacity and location | Typical unit | Your capacity, site and state |
| Figures | Illustrative | Built on current prices and quotations |
| Machinery suppliers and quotations | No | Yes |
| Market survey for your region | No | Yes |
| Bank or scheme format (PMEGP, term loan) | No | Yes |
| Use for a loan application | No | Yes |
Real NPCS soft gelatin capsules project reports
These are soft gelatin capsules project reports NPCS has prepared, with the plant capacity, total capital investment, rate of return and break-even worked out in each. Costs have moved since some were written, so we bring any of them up to date for your capacity and location.
| Project report | Plant capacity | Total investment | Rate of return | Break-even | Action |
|---|---|---|---|---|---|
| Gelatin Capsules Soft and Hard (Vegetable and Non-Veg. Base) | 60 MT/ANNUM | ₹2.2 crore | 35% | 55% | Get this report |
| Soft Gelatin Capsules (Softgel Capsules) | 1,800,000 Th.Nos./annum | ₹4.78 crore | 27% | 57% | Get this report |
| Soft AND Hard Gelatin Capsules (VEGETABLE AND NON VEG. BASE) | 2880000 Nos. /day | ₹6.37 crore | 36% | 43% | Get this report |
| Soft Gelatin Capsules | 1,800,000 Th.Nos./annum | ₹47.81 crore | 27% | 57% | Get this report |
| Soft Gelatin Capsules | Soft Gelatin Capsules: 3120000Nos./Day | ₹108.71 crore | 35% | 31% | Get this report |
Figures as worked out in each NPCS report. Total investment includes plant and machinery, land and building, and working capital.
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Soft Gelatin Capsules project report: frequently asked questions
How much does it cost to set up a soft gelatin capsules plant in India?
Our sample report models a 3,30,000 capsules per day plant at ₹565 lakh, including land, building, a GMP facility and working capital margin. As an indicative guide, a single-line unit in leased premises starts around ₹2.5–4 crore, and a multi-line plant built for WHO-GMP audits can need ₹8–20 crore. Your own report prices your capacity, fills and location.
What raw materials are used to make soft gelatin capsules?
The shell is pharmaceutical grade gelatin, a plasticiser such as glycerin or sorbitol, purified water, and colours or an opacifier. The fill is the active ingredient in an oil or carrier. In our sample report the fill actives and oils make up 58% of raw material cost and gelatin 27%, so fill prices move profit the most.
Which machine is used to make softgel capsules?
A rotary die encapsulation machine forms two gelatin ribbons, injects the fill and seals and cuts each capsule between a pair of dies. Around it you need a gelatin melting tank, a fill mixing tank or colloid mill, tumble dryers, a low-humidity drying room, an inspection machine and packing equipment. In our sample the encapsulation machine is the largest item at ₹82.57 lakh.
Which licence is needed to manufacture soft gelatin capsules?
For medicines you need a drug manufacturing licence from the State Licensing Authority under the Drugs Rules, 1945, and a facility that meets revised Schedule M good manufacturing practices. Nutraceutical softgels sold as health supplements need an FSSAI licence instead. You also need pollution board consent, a factory licence and the usual registrations.
Is soft gelatin capsule manufacturing profitable?
In our illustrative sample, the plant earns a 31% return on investment in Year 3, breaks even at 35% of capacity and pays back in about 2.9 years. Real results depend on keeping contract orders steady, controlling gelatin waste and rejects, and passing customer GMP audits. Lenders usually ask for letters of intent from buyers before they sanction.
What is the difference between soft and hard gelatin capsules?
A soft gelatin capsule is a single sealed shell made and filled in one step, and it usually holds an oil, liquid or paste. A hard gelatin capsule has two pre-made halves that are filled with powder or pellets and pushed together. The two need different machines, so a softgel plant is not a hard capsule filling line.
Is the sample report free and can I use it for a loan?
Yes, the sample soft gelatin capsules project report PDF is free to view and download. It is illustrative and shows the format and depth of an NPCS report, but its figures are representative and not from a real project, so do not submit it to a bank. For a loan, NPCS prepares a report for your own capacity, fills, location and lender.
Sources and references
- Lok Sabha Unstarred Question No. 864 on revised Schedule M (answered 29 Nov 2024)Ministry of Health and Family Welfare, Lok Sabha Digital Library, checked Oct 2026
- Extension of timeline for revised Schedule M for small and medium manufacturers (circular dated 6 Feb 2025)Pharmaceuticals Export Promotion Council of India (Pharmexcil), checked Oct 2026
- 56th GST Council meeting: press release on GST rate changesGST Council, Government of India, checked Oct 2026
- Food Safety and Standards (Health Supplements, Nutraceuticals and other foods) Regulations, 2022Food Safety and Standards Authority of India, checked Oct 2026
The NPCS project team, led by Ajay Kumar Gupta
This page and its sample report are prepared and reviewed by the NPCS project team, which has written techno-economic feasibility studies and detailed project reports since 1994.
Ajay Kumar Gupta founded Niir Project Consultancy Services (NPCS) and leads the organisation. With 40 years of experience in MSME project consulting, he has built the team that has delivered more than 28,000 project reports for clients worldwide, helping entrepreneurs plan and finance profitable manufacturing businesses.
- Published
- Last updated
- Next review
- Oct 2027
- Reviewed by
- NPCS project team
This page is reviewed every 12 months, or sooner when scheme limits, GST rates, BIS rules or pollution categories change. The sample report is illustrative: its figures are generated from industry-typical ratios for a unit of this size, checked so every statement balances, and are not taken from any client project.