India Inc’s Cash and Bank Balances Cross Rs 10 Lakh Crore in FY25 Amid Cautious Capex Approach

India’s listed companies excluding BFSI and oil & gas sectors amassed a record Rs 10.67 lakh crore in cash and bank balances by the end of FY25, marking a robust 15% increase over FY24’s Rs 9.26 lakh crore, according to ACE Equities data. This represents a more than 50% rise compared to FY20’s Rs 5.5 lakh crore, underscoring a strategic recalibration in corporate treasury management amid ongoing economic and geopolitical uncertainties.

Highlights:

• Total cash and bank balances reached Rs 10.67 lakh crore in FY25.

• 15% year-on-year increase, over 50% rise since FY20.

• 3,611 listed companies accounted for these reserves, excluding BFSI and oil & gas.

Sectoral Breakdown: IT and Automobile Lead in Cash Reserves

Among sectors, IT companies led with cash holdings exceeding Rs 1.17 lakh crore, closely followed by automobile and auto ancillary firms at Rs 1.15 lakh crore. Metals, steel, and mining collectively held Rs 1.1 lakh crore, engineering firms maintained over Rs 73,000 crore, pharmaceuticals over Rs 65,000 crore, and the defence sector reported Rs 54,400 crore in liquid assets. This diversified accumulation indicates widespread cautiousness and liquidity preservation across industries.

Highlights:

• IT sector: Rs 1.17 lakh crore cash reserves.

• Automobile & auto ancillary: Rs 1.15 lakh crore.

• Metals, steel & mining: Rs 1.1 lakh crore.

• Engineering, pharma, and defence sectors hold significant liquidity buffers.

Corporate Caution in Capital Expenditure Amid Global and Domestic Uncertainties

Analysts attribute the growing cash piles to prudent corporate behavior in response to fragile global growth, trade tensions, volatile commodity and currency markets, and uncertain demand outlooks. Firms are exercising caution in deploying fresh capital expenditure, preferring to maintain liquidity for potential acquisitions or to mitigate risks from regulatory changes and supply chain disruptions.

Akshat Garg, AVP at Choice Wealth, highlighted that despite strong earnings in sectors like auto, IT, pharma, and renewables, companies favor financial prudence, reflecting evolved risk management. This approach signals a preference for flexibility and resilience over aggressive expansion in the near term.

Highlights:

• Corporates remain cautious on fresh capital expenditure.

• Liquidity retained for acquisitions and risk mitigation.

• Prudent financial management amid global economic weakness and trade frictions.

Investment Trends and External Factors Influencing Corporate Strategy

Private sector capital expenditure has remained subdued, with balance sheet deleveraging taking precedence, noted Apurva Sheth from Samco Securities. Public sector investments continue to drive infrastructure growth in roads, railways, and defence. The dominance of China as a low-cost supplier, coupled with tariff measures initiated under the Trump administration, has further delayed Indian corporate modernisation and expansion plans, prompting a wait-and-watch stance.

Highlights:

• Private sector capex muted; focus on deleveraging.

• Public sector leads infrastructure investments.

• China’s low-cost advantage and tariff uncertainties weigh on domestic expansion plans.