India Inc begins to tap its cash reserves, but not for capex yet

After years of aggressive hoarding, Indian corporations are starting to tap cash reserves to fund dividend payouts and acquisitions, but not capital expenditure.

- Abhinaba Saha

A Mint analysis of data from the Centre for Monitoring Indian Economy showed the pace of cash accumulation hit an eight-year low by September 2025. It showed that cash and bank balances rose just 1% year-on-year to about ₹5.4 trillion by September. This is a far cry from the pandemic era, when uncertainty pushed median cash balances up by nearly 15% annually between September 2020 and September 2024.

Companies now sit on a cash pile equivalent to nearly 5% of total assets, up from 3.5% in September 2017 and 4% in September 2020, the analysis showed.

However, these levels are still below those of their global peers. According to an August 2025 Morgan Stanley report, Indian corporate cash holdings trailed both the US and global medians, which stood at 9% and 11% of total assets, respectively, in 2024.