What are some good businesses to start in India with a Rs. 10-12 crore capital?

Mahesh Murthy

First, Rs. 5 crores is not "large capital". It's small-ish capital, when it comes to starting most businesses in India today. Second, I am not sure what your deal is to get the Rs. 5 cr. Do you have to return it? Is there a RoI expectation for whoever is giving it to you? Are you getting it free and clear with no expectation of any return? When, if ever, do you need to return it? Understanding all of this is going to play a key part in suggesting what types of businesses you can start. I apologise, this isn't really an answer to your question - but I simply can't suggest stuff without knowing and understanding more.---------------Now that there's a clarification on the question, I'll take a stab at some sort of an  answer.You take an unsecured loan of Rs. 5 cr (US$840,000), and you pay simple interest at 1% per month - that is Rs. 5 lakhs (US$8,400) per month - and at some period - let's say 5 years or so from now you need to return the principal back in fullRs. 5 lakhs a month in interest costs alone is not a small amount, by the way. You also want some income / profit from this to add to your salary of Rs. 60,000 (US$1,000) a month. Let's say you want to take it up by Rs. 100,000.So now the business must generate profits of Rs. 600,000 from month 1, on an investment of Rs. 5 cr.Wow. Break that down - Rs. 20,000 a day (US$335) from month 1. Let's assume that your business has some unreasonably high profit margin after all operating costs. Say, 35%.That means your business has to generate (600,000/35% = Rs. 17,15,000) in revenues every month. Or around Rs. 70,000 per working day. Or over Rs. 2 cr in annual revenues on Rs. 5 cr in investment. In a year.And if you were paying taxes, you'd need to generate Rs. 3 cr, pay ~30% in taxes to be left with Rs. 2 cr.A 40% to 60% IRR, if I were to use the phrase loosely.And you want social impact from your investment too. Double wow.And it has to run without your constant intervention Triple wow.And it has to be sustainable - i.e. after the loan is paid back, it has to still be a business which supports itself. Quad wow.Really, I don't know too many businesses that can do that. But here are some thought-starters:1. Starting a lending business. Micro-finance, or what you will. If you can figure out how to do high-risk lending, you could earn 2.5% to 3.5% a month - and then add up to that 40% to 60% IRR. But I'm not sure how you can do this on a hands-off basis, and not suffer occasional loss of capital or delinquent customers.2. Start a MLM business. I personally detest this business - and won't offer you the financials - I am sure you can find it elsewhere online - but it would fit your needs. However, you run the risk of getting arrested or lynched by unhappy down-liners. I assume if you have powerful benefactors who can lend you a huge sum with no security at a low interest rate, they are also powerful enough to bail you out.3. You can sell drugs. Ditto to the technicals as above.4. Maybe you can buy land and build some sort of 60-room resort on it within this amount (tough but possible) and then charge Rs. 4,000 or Rs. 5,000 a room night and make the Rs. 17 lakhs a month on an average of 30% inventory fill across the year. Don't know the social value etc. here. And I don't know how you can do this hands-off well.5. You could set up a pharma outfit to manufacture off-patent or generic rare drugs at smaller volumes than the large companies bother with. There's huge margins here. But you need to invest, set up distribution systems etc. So it's not hands-off.Am running out of ideas now.I do think it's a tough ask, given what you've said.But I do hope tis answer points you deeper in a few directions.Cheers,My $0.02,

Mahesh

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Vijay Anand

Want me to be brutal with you? You are not thinking through this one.The purpose of starting a business (or atleast one of them) is to build assets. You are essentially getting rid of an Asset, not even knowing what you are going to do with it. That might be the most unwise thing to do. It's like selling a mountain of gold, to go buy ice. Maybe the Ice is beneficial, but unless you have a purpose, it will disappear rather quickly.You don't need 10 - 12 crores. Go join a kickass startup - there are plenty of them out there these days. Leverage the degree that you have and figure out what you are passionate about and will commit 5-10 years of your life in. Along the way, learn financial prudence (aka save some money). Along the way, and having fun, and figuring out life, you will figure out what you like doing, and perhaps you will come across an opportunity to build something, and the skillsets that you have acquired in life will come in handy.Let the inheritance of your parents belong to your kids. Don't screw it up. You don't want to be the dad, the kids talk about "My grandpa used to own a sizeable property, but now we are in a rented house" sorta way. Use it as a safety net, but the inheritance isnt yours to experiment your life with. Figure that out, using your own wits and where your parents have managed to get you. If you are graduating with an MBBS, thats quite a bit, compared to most people could start with.Good luck.

That's just my thought.

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Deepak Alse

At 21, entrepreneurship is an option for someone who has an idea that he/she cannot sleep on. Or if you have a godfather willing to humor your experience gaining with some capital.  Otherwise, entrepreneurship is best reserved for a later day. Great professional learning experience cannot come with minimal constant attention. If you have 5 crores and keen interest in real estate, you should spend some time looking for markets where the rental income per square feet is growing faster than the underlying property - If you have an appetite for risk and a good sense of the economics of commercial real estate, five crores can help you buy reasonable chunks to profit from, especially if you know someone who has good grasp of retail industry, needs the floor space to get started and is willing to pay you more than what you need to payback to your investors.

You are trying to become a middle man investor - Middle men succeed only when they spread their risks across multiple customers and that means they can never run a business with minimal constant attention. You are just starting out, so it is better to think of committing yourself to whatever you do. The 'visionary' part can wait...


Category: Business ideas

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