BMC to drive home profits made through Special Purpose Vehicle

Civic body to take 3% stake in start-ups aided by SPV, sell off stake once company starts making profits, and invest it back into its scheme

The SPV will be headed by the Municipal Commissioner and will function independently. Representational Picture

The BMC is giving out-of-the-box business ideas a monetary boost, but not before ensuring it gets a piece of their profits too. After deciding on forming a Special Purpose Vehicle (SPV) to support them, BMC now has plans for taking a three per cent stake in these start-ups to ensure that the initial funding given to these businesses is not provided for free.

IIT-B's share?
When the company starts to make high profits, BMC plans to sell off its share and invest money from that back into the SPV. This amount is likely to help SPV procure more space to support new start-ups. BMC has a provision of R25 crore in its annual budget for this initiative.

The SPV, to be headed by the Municipal Commissioner, will be run in partnership with IIT-Bombay, which will provide technical support. But the institution's share in the start-ups is yet to be ascertained. A senior civic official, said, "This 3 per cent of share will be of the SPV, which will be used for its growth. No one else will have a separate share. IIT-B's share in the 3 per cent is yet to be decided."

Make it independent
With just 4,500 square feet of space currently available with BMC, the SPV can support hardly 10-odd start-ups. This space is mainly in BMC's welfare and community centres. Civic officials said they want to make SPV an independent body so that it does not have to depend on BMC for money to support the start-ups. Apart from BMC and IIT-B officials and management experts, the SPV would be having expert members from fields such as finance, law and industries to help support the ideas and aid growing the start-ups into a large business. The SPV will be headed by the Municipal Commissioner and function independently. BMC will help each start-up with a maximum investment of Rs 25 lakh.

Deputy Municipal Commissioner, Chandrashekhar Chore, said, "This SPV will act as an independent body with several experts as its members. There will be 30% preference given to those coming up with ideas that can be of great help to better existing civic services. But, enough importance and push will also be given in support of ideas in any other sector."

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