Pvt sector cash balance up 40%

The private sector was sitting on cash and bank balance of Rs 61,000 crore in 2005-06, nearly 40 per cent more than the Rs 44,000 crore in 2004-05. Almost 70 per cent of the bank balance was parked in deposits and the rest in current accounts.

While a bulk of bank balance came from balance in profit and loss accounts, borrowings from overseas markets through FCCBs (foreign currency convertible bonds) also contributed significantly to India Inc's total cash balance.

Of the Rs 17,000 increment in bank balance over 2004-05, Rs 12,724 crore came from balance in profit and loss accounts, while the remaining from domestic and overseas borrowings.

Videocon Industries (Rs 1,396 crore), Tantia Construction (Rs 1,357 crore), Sterling Biotech (Rs 1.021 crore), Hindustan Construction (Rs 1,006 crore), Amtek Auto (Rs 641 crore), Bharat Forge (Rs 505 crore) and Bharati Shipyard (Rs 482 crore) have put the money they had mobilised via the FCCB route in deposits.

Frontline software companies like Infosys Technologies (Rs 3,279 crore), Satyam Computer (Rs 3,053 crore), Wipro (Rs 823 crore) and Patni Computers (Rs 570 crore), on the other hand, parked their profit and loss balance in deposits with banks. Reliance Energy's cash balance swelled to Rs 6,045 crore in 2004-05 from Rs 221 crore in 2003-04.

The company raised Rs 1,000 crore through overseas borrowings and Rs 650 crore from domestic markets via short-term CPs (commercial papers).

The companies that proposed expansions like Reliance Energy (Rs 5,663 crore), Reliance Industries (Rs 2,146 crore), Maruti Udyog (Rs 1,401 crore), Sun Pharma (Rs 1,230 crore) and Tata Motors (Rs 1,119 crore) have pumped their FCCBs and profit balance in banks.

The announcements made during 2005-06 reveal that all leading companies have drawn up their capital expenditure plans based on their cash pile.

Dr Reddy's Laboratories, Ranbaxy Laboratories, Sun Pharma, Jubilant Organosys, Torrent Pharma, Dishman Pharma, Satyam Computer, Maruti Udyog, Amtek Auto, Tata Motors, Mahindra & Mahindra and Aban Lloyd have already used their war chest for acquisitions.