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By Yoosef K Mar 3, 2023 6:11:26 PM IST (Published)
J.P. Morgan which has an “overweight” rating on RIL with a target price of Rs 3,015, observed, “we expect overall spending levels to moderate as spectrum acquisition is behind us and large immediate spending in the New Energy business is unlikely.”
Muted performance in the first half of FY23 coupled with increased Capex spending at select heavyweights has brought down India Inc's combined cash reserves to Rs 11.7 lakh crore as of September 2022 – the lowest tally since FY20. The Cash & Equivalents of 412 common companies from the BSE500 index (excluding banks and financials) stood at Rs 9.6 lakh crore at the end of March 2020, data compiled from Bloomberg show.
| At the end of | Cash & Equivalents (Rs lakh crore) |
| Mar-20 | 9.6 |
| Mar-21 | 11.9 |
| Mar-22 | 12.2 |
| Sep-22 | 11.7 |
| Source: Bloomberg | Sample of BSE500 companies (excluding banks & financials) |
While a large spend in retail and Jio during the nine months ended December 2022 impacted Reliance Industries' cash balance, it was higher pay out and the deleveraging exercise at Vedanta resulted in a reduction of Rs 5,647 crore in cash balance. The Cash and Equivalents of Vedanta at the end of September 2022 stood at Rs 26,617 crore.
Decrease in Cash & Equivalents (in Rs crore)
| Company | As of March 2022 | As of September 2022 |
| RIL | 1,44,296 | 1,18,263 |
| Tata Motors | 63,378 | 48,522 |
| Tata Steel | 24,423 | 15,682 |
| Hindalco Industries | 22,828 | 16,658 |
| Vedanta | 32,264 | 26,617 |
Commenting on the cash reserves post Q3 earnings, Ajay Goel, acting CFO of Vedanta observed that “It may have multiple usages, example remains using the money for funding our project in terms of growth CapEx and including the payment of the dividend and the deleveraging both Vedanta and Vedanta Resources”. Vedanta -- the highest dividend-paying Company amongst its peers in India -- has already announced Rs 81 per share as a dividend for fiscal 2023.