Categories: Business

Cash Reserves Of BSE 500 Companies Surge To ₹7.68 Lakh Crore

The cash reserves of BSE 500 companies (excluding the banking, financial services, insurance (BFSI), and oil & gas sectors) climbed to ₹7.68 lakh crore as of September 30, 2024, according to ACE Equities’ data. This marks a 51% jump compared to ₹5.06 lakh crore at the end of FY20, just before the COVID-19 pandemic.

Key Drivers Behind The Growth

Analysts attribute this impressive growth to several factors:

  1. Stock Market Momentum: A buoyant stock market supported equity fundraising through Initial Public Offerings (IPOs) and Qualified Institutional Placements (QIPs).
  2. Premiumisation and Digitisation: Shifts toward premium products and increased digitisation boosted profit margins.
  3. Industry Consolidation: Consolidation in various sectors reduced competition and improved financial stability.
  4. Operational Prudence: Companies adopted stricter cost control measures.

Post-Pandemic Strategy Shift

Post-pandemic, Indian corporates prioritized healthier balance sheets. The demand boom following COVID-19 further supported this focus on reducing debt.

Also Read: Securitisation Volumes Hit ₹68,000 Crore In Q3 FY25, Driven by Banks And NBFCs

“The pandemic taught companies the importance of maintaining higher liquidity for unforeseen challenges,” said Bhavesh Shah, Managing Director and Head of Investment Banking at Equirus.

Role Of Stock Market In Deleveraging

Shah also noted that a strong stock market played a significant role in helping companies reduce debt. “The IPO and QIP rallies allowed companies to deleverage, as debt repayment became a key focus for IPO fund utilization. Markets reward companies with debt-free operations,” he added.

Shibra Arshad

Recent Posts

JP Nadda Slams Rahul Gandhi’s ‘Match-Fixing’ Claims As ‘Desperation Of Losing’ Polls

Rahul Gandhi's opinion piece appeared in a national daily and sparked political uproar. Opposition parties…

2 hours ago

Poverty In India Reduced Via Tangible Boost In Household Living Standards, Incomes

In 2022–23, poverty under the revised $3.00 line stood at just 5.25 per cent in…

2 hours ago

Chhattisgarh: Seven Maoists Killed In Indravati National Park Operation

Five Maoists were killed in two separate encounters with security forces in Chhattisgarh’s Bijapur district,…

3 hours ago

Carney Invites Modi To G7 Summit, Highlights India’s Global Supply Chain Role

Canadian Prime Minister Mark Carney said the most populous country, with the fifth-largest economy, must…

3 hours ago

RBI Frontloads Rate Cuts To Boost Growth Amid Low Inflation: Crisil

The Reserve Bank of India (RBI) has frontloaded its rate cuts to support economic growth,…

3 hours ago

PM Modi Urges Global Action On Coastal Resilience At Nice Summit

PM Narendra Modi on Saturday called for urgent global action to build infrastructure that can…

4 hours ago