Five companies hold over 60% of their assets in cash, but this doesn't always translate to free cash for shareholders. According to reports from The Economic Times, these companies include Indian Energy Exchange (74% liquid assets), IndiaMART InterMESH (67%), GSK Pharmaceuticals (64%), Pfizer (63%), and Honeywell Automation (61%). While these ratios appear attractive on paper, significant portions of this cash serve specific business purposes rather than being available for shareholder returns.
Indian Energy Exchange shows the highest liquid asset ratio at 74%, but this figure is misleading according to the analysis. As reported by The Economic Times, in FY26, IEX held ₹1,692 crore in current investments but only ₹36.5 crore in cash and cash equivalents. The exchange operates a 'Settlement Guarantee Fund' that must maintain safe, liquid instruments by regulation, mixing market liquidity requirements with the company's own funds. Despite revenue and profit growing at approximately 16-19% annually between FY21-FY26, the 74% figure significantly overstates the available surplus for shareholders.
Pfizer has maintained high liquid balances consistently, rising from 49% in FY19 to 63% by FY26. According to the analysis, the listed Indian business requires minimal capital expenditure, with property, plant and equipment at only ₹136 crore against ₹2,520 crore revenue in FY26. The company generated ₹968 crore operating cash in FY26 but revenue grew just 2.4% annually over FY21-26. Pfizer paid ₹752 crore in dividends in FY26 and has recommended ₹75 per share since, though the cash generation rate may not sustain as growth slows.
Honeywell Automation operates as a system integrator and contract manufacturer, requiring working capital rather than fixed assets. As reported by The Economic Times, liquid balances increased from ₹1,797 crore (45.5% of assets) in FY21 to ₹3,806 crore (61.1% of assets) in FY26. The company's profit after tax rose from ₹339 crore to ₹525 crore between FY22-FY26, while dividends increased only from ₹90 to ₹110 per share. Management points to automation and energy transition opportunities, but the annual report does not connect the ₹3,806 crore treasury to specific acquisition or capacity plans.
According to the analysis, investors should calculate true surplus cash by subtracting debt, operating float, restricted balances, and genuine business working capital requirements. The report emphasizes that large cash balances can represent genuine business cushions or decades-long habits of collecting profits without finding deployment opportunities. These five companies demonstrate different approaches to cash management, with IEX's cash being mostly structural, Pfizer's representing slow-growth business returns, and Honeywell's requiring the most compelling explanation for its large unused cash position. The analysis suggests that while these companies maintain substantial cash positions, the actual availability for shareholder returns remains limited by business requirements.
