Indian companies sit on a cash mountain—will shareholders reap the rewards?
1 week, 1 day ago

Indian companies sit on a cash mountain—will shareholders reap the rewards?

Live Mint  

A bunch of top companies is hanging on to almost ₹1 trillion of free cash that it has yet to find a use for, according to an analysis done by a proxy advisory firm. A report by Mumbai-based IiAS of the Sensex 500 companies—with a few exclusions—shows that 66 of these companies collectively held ₹2.7 trillion in cash and equivalents at the end of FY24. Weak dividend policies The report also flagged gaps in existing dividend distribution policies, with just 16 of the 66 companies having clearly defined dividend payout ratios linked to profits. “As a result, the dividend distribution policies often provide no guidance to shareholders on possible returns," the report said, adding that a link between dividends and profits could help investors better assess returns from a stock. Firms with significant leverage or negative free cash flows were also filtered out, leaving only those with robust financial health and cash reserves exceeding last year’s net profit.

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History of this topic

India Inc's plunging cash flows are a bad omen
2 years, 1 month ago

India Inc's plunging cash flows are a bad omen

Live Mint  

India Inc.’s aggregate operating cash flows have fallen year-on-year for the half year ended 30 September. View Full Image Reality check The trouble with star ratings of packaged food Headhunters scramble as hiring falls in Q3 How Indian techies in the US manage their finances “In the current backdrop, the old adage, ‘Topline is vanity, the bottom line is sanity …

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