Indian Inc sits on cash pile of Rs 3.5 lakh cr
By siliconindia   |   Tuesday, 10 July 2007, 19:30 IST
Printer Print Email Email
Mumbai: Indian companies seem to be on an expansion and acquisition spree lately. Excluding the financial services companies, Indian companies are sitting on a cash mountain of Rs 3,50,000 crore, nearly three times higher than Rs 1,25,000 crore at the end of March 2006. Analysts say that retail offers a big opportunity and acquisitions are a way to grow rapidly; there is also the need to deploy this money gainfully. Industry has declared a total dividend of Rs 40,000 crore in 2006-07 with declarations still coming in. In 2005-06, the dividend payout was Rs 42,300 crore. The cash surplus figure has been swelled by a cash profit of Rs 2,15,000 crore in the 12 months ended March this year. Cash profit is the sum of net profit and depreciation. Listed public sector undertakings alone have Rs 1,25,000 crore of cash profit and bank balance. The list is headed by oil giant ONGC, which declared a cash profit of over Rs 25,000 crore in the last financial year, reported Business Standard. A quiet noticeable amount is with the banks. "Strictly in keeping with the government's guidelines, we have a panel of 40 banks. All of them are Indian banks; there is no foreign bank on the panel. We have set exposure limits for each," said R S Sharma, Chairman and MD, ONGC. Acquisitions are also playing a vital part in the expansion plans. Tata Steel's recent purchase of Corus was funded by Tata Sons, the holding company of the group, which has received over Rs 1,400 crore in dividend over the last three years. Tata Steel itself made cash profit of over Rs 5,000 crore in 2006-07. Its software sibling, Tata Consultancy Services, declared a cash profit of Rs 4,100 crore. The cement sector also plans to expand capacity to cope with the growing demand from real estate, roadways and special economic zones.

siliconindia