Muted performance in the first half of FY23 coupled with increased Capex spending at select heavyweights has brought down India Inc's combined cash reserves to Rs 11.7 lakh crore as of September 2022 – the lowest tally since FY20. The Cash & Equivalents of 412 common companies from the BSE500 index (excluding banks and financials) stood at Rs 9.6 lakh crore at the end of March 2020, data compiled from Bloomberg show.
| At the end of | Cash & Equivalents (Rs lakh crore) |
| Mar-20 | 9.6 |
| Mar-21 | 11.9 |
| Mar-22 | 12.2 |
| Sep-22 | 11.7 |
| Source: Bloomberg | Sample of BSE500 companies (excluding banks & financials) |
While a large spend in retail and Jio during the nine months ended December 2022 impacted Reliance Industries' cash balance, it was higher pay out and the deleveraging exercise at Vedanta resulted in a reduction of Rs 5,647 crore in cash balance. The Cash and Equivalents of Vedanta at the end of September 2022 stood at Rs 26,617 crore.
Decrease in Cash & Equivalents (in Rs crore)
| Company | As of March 2022 | |
| RIL | 1,44,296 | 1,18,263 |
| Tata Motors | 63,378 | 48,522 |
| Tata Steel | 24,423 | 15,682 |
| Hindalco Industries | 22,828 | 16,658 |
| Vedanta | 32,264 | 26,617 |
Commenting on the cash reserves post Q3 earnings, Ajay Goel, acting CFO of Vedanta observed that “It may have multiple usages, example remains using the money for funding our project in terms of growth CapEx and including the payment of the dividend and the deleveraging both Vedanta and Vedanta Resources”. Vedanta -- the highest dividend-paying Company amongst its peers in India -- has already announced Rs 81 per share as a dividend for fiscal 2023.
Increase in Cash & Equivalents (in Rs crore)
| Company | As of March 2022 | |
| ONGC | 12,212 | 36,541 |
| Coal India | 35,593 | 44,454 |
| Bharti Airtel | 6,957 | 13,400 |
| Oil India | 2,131 | 4,884 |
| Jindal Steel & Power | 4,001 | 6,746 |
On the other hand, J.P. Morgan which has an “overweight” rating on RIL with a target price of Rs 3,015, observed, “we expect overall spending levels to moderate as spectrum acquisition is behind us and large immediate spending in the New Energy business is unlikely.”
Other firms which saw a sharp increase in Capex include Ambuja Cements, Grasim Industries, JSW Steel and others. Of the 412 companies, 54 percent reported a decline in their cash reserves whereas their aggregate net profit fell by 6.5 percent to Rs 2.93 lakh crore during the first half of FY23. State-owned Coal India and Oil India reported a surge in their cash reserves on improved profitability. Both of them had posted over a two-fold jump in H1 net profit on the back of better-than-expected realisation and firm crude prices. Among companies with high cash reserves include state-owned ONGC, Coal India and Oil India.
(With input from Bloomberg)
(Edited by : Vivek Dubey)
