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Protect and preserve the present, while you navigate future, says Hero MotoCorp CFO Niranjan Gupta


Mature companies need to adopt a comprehensive dynamism where they navigate for the future while protecting and preserving the present, said Niranjan Gupta, chief financial officer of Hero MotoCorp. The failure rate for startups is around 70-80%, but 80% of mature companies cannot afford to fail, so it's an additional burden on mature companies to protect their present, he added.


The additional responsibility of a regulated company's CFO is to be accountable for quarterly earnings and ensure the company is not left behind in the race on the new business models, and new mobility systems, he said.

Gupta highlighted that to develop new business models, along with corporate structure company's need to change the mindset, Hero MotoCorp has adopted a changed mindset and has launched its new vision, which is to be the future of mobility, and not just be confined to two-wheelers or affordable two-wheelers.

On the burden of accountability to investors on mature companies, Gupta said that for mature companies, since there are investors and there is a dilemma. "Investors would want quarterly results, new business models and also value to be created. And of course, they wouldn’t like to see cash burn," he said.

According to Gupta, adopting the subsidiary route is one method to deal with this situation. "The company can then behave like a startup, while the parent company continues to be held accountable for the kind of cash generation and quarterly reporting the company needs to do," he said.

(This story has been written by Alekh Shah and the excerpts have been taken from the session 'Unconventional Wisdom: Traditional CFO v/s Startup CFO' at ETCFO Turning Point, 2021)

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