India Inc sits on ₹5 tn cash, pauses major projects

Companies are now sitting on cash and cash equivalents amounting to nearly 12% of their total assets

- Abhinaba Saha

Amid a patchy demand recovery and lingering global uncertainty, India Inc. continued to hoard cash in the last fiscal year, choosing financial buffers over fresh investments. Despite rising profits and healthy balance sheets, companies showed little urgency to deploy capital, preferring to return more to shareholders instead.

A Mint analysis of cash holdings of 285 BSE-listed firms, excluding banking, financial services and insurance companies, showed a 12% year-on-year rise to ₹5.09 trillion in FY25.

Yet, new project announcements fell 5% in the same period, following a 3% contraction in FY24, according to the Centre for Monitoring Indian Economy's (CMIE) project-tracking database.

Companies are now sitting on cash and cash equivalents amounting to nearly 12% of their total assets. The rising number of firms with high cash ratios also points to subdued confidence in future business prospects. Between FY24 and FY25, more companies positioned themselves defensively, holding 25-50% of their assets in highly liquid form, the analysis showed.