How the TOP 25 listed profit making companies can save the startups?

Growth hacking

Out of the top 25 companies, the total profit for the year FY 2015-16 is more than 250,000 crore. Now imagine, 1% of the amount is annually dedicated to CSUR (Corporate Start-up responsibility) and just even with 1 crore is invested in each start-ups, which has built traction with a strong team and seeking the mentorship and support from these companies can reach greater heights. Around 2500 companies can come up with strong support of this Corporate’s.

If we further reduce it to top 13 companies, the profit is around 150,000 crore. While analyzing the top 13, the start-ups in the respective sectors can benefit immensely.

Top 13 companies in different sectors with their annual profits

No   Sectors                    Annual Profit            Sectors which can support   No of Start-ups

4 Banks 39331 Fin tech 393
4 IT 51501 Technology 515
3 Oil & Gas 33835 Clean tech 338
2 Conglomerate 37,262 Other 373
13 162327 1623

 

The top 4 banks namely SBI, ICICI, HDFC and AXIS Bank together with 39331 crore profit can support with 1% of their profits towards CSUR (Corporate Start-up Responsibilities) to 393 start-ups in the Fin tech sector alone. It will not only boost these start-ups morale but also help the top 4 banks to get access to the innovative technologies and products as well as services developed by these start-ups. By broadening the vision of these start-ups, a global product or services model can be built.  Since, it is a with profit initiative of Banks, it can get around 10-20% equity in each start-ups or get preferential shares or convertibles. Alternatively, banks can lend to these start-ups with a convertible with annual payout options.

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Just by nurturing and giving access to research of the Banks requirements, many start-ups can create world class products. This will not only boost the morale of start-ups but also will help them to establish in the market and get access to the next round of funding by institutional investors like Venture Capitalists. In fact, The VCs would love to support a Start-up, which is nurtured by any of these Banks. A structured approach is required by the Banks to support these start-ups for ensuring success of these start-ups.

Similarly, the top three companies in the Oil and Natural gas sector with annual profit of 33,835 crores can support 338 start-ups  in the Clean tech sector with 1 crore investments in each start-ups.

List of Top 25 companies with their profits for FY 2016

Reliance Conglomerate 27,417
ONGC Oil & Gas 33,835
TCS IT 22,883
Coal India Power 16,344
Infosys IT 15,786
HDFC Bank Bank 12,296
IOC Oil & Gas 10,399
NTPC Power 10,243
SBI Bank 9,951
ITC Conglomerate 9,845
ICICI Bank Bank 9,726
Hind Zinc Natural Resources 8,167
Wipro IT 8,099
Bharti Airtel Telecom 7,547
BPCL Oil & Gas 7,432
Axis Bank Bank 7,358
HDFC Bank 7,093
Power Finance Finance 6,113
Power Grid Corp Power 6,027
REC Power 5,628
Vedanta Natural Resources 5,472
Larsen Engineering 5,311
Tata Steel Steel 4,901
HCL Tech IT 4,734
Maruti Suzuki Automobile 4,571
Total Profit 267,176
Source: Moneycontrol.com

So is it not a better time to be an entrepreneur? Start wearing the entrepreneur hat and build a world class product or Services Company.

Author: Shrihari Allangala writes on matters of investment, funding and startups.  He is a Director of WiseLane Ventures Pvt Ltd.

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