New Delhi: Global economic crisis and Satyam fiasco may have hit the Indian IT sector hard, but the four leading software exporters -- TCS, Infosys, Wipro and HCL Technologies -- are sitting on a cash pile of over $4 billion, majority of which they have moved to public sector banks.
Probably, after the concerns emanating from Satyam founder and the then chairman B Ramalinga Raju’s disclosure about cooking up books for several years, most of the IT companies have started disclosing the whereabouts of their cash reserves.
Together, the four leading IT firms have about Rs20,000 crore of cash and equivalents as on 31 December 2008.
Infosys has the highest cash among peers in its books which stands at Rs9,686 crore, mainly as deposits with domestic banks. It is followed by Wipro with Rs5,855 crore, TCS with Rs2,163 crore and HCL Technologies at Rs2,033 crore ($416.1 million).
Also, Infosys has parked its largest chunk of reserves with State Bank of India (Rs2,000 crore). Besides, it has close to Rs1,000 crore with HDFC and about Rs260 crore with HDFC bank.
“About 67% of our portfolio is kept in nationalised banks in India,” Infosys CFO V Balakrishnan said.
The disclosure by Infosys shows a clear migration of deposits from Indian private sector banks such as Axis Bank, ICICI Banks and HDFC to public sector banks.
The country’s top software exporter TCS also has cash and fund investments to the tune of about Rs2,163 crore, even after the acquisition of Citi Global Services Ltd.
During the quarter (ended 31 December 2008) we moved a considerable part of our funds to fixed deposits with the Indian and foreign banks of proven rating, TCS CFO S Mahalingam said.
The third largest software exporter Wipro had a cash reserve of Rs5,855 crore deposited in banks and held in various other instruments, as on 31 December 2008.
The company’s highest deposits are with HDFC Bank at Rs634 crore, followed by the State Bank of India Rs573 crore.
IT major HCL Technologies had also moved a bulk of its cash out of the mutual funds to the safety of public-sector bank deposits.
Disclosing the whereabouts of its cash and cash equivalent as well as treasury investments worth about $416.1 million (Rs2,033 crore), HCL Tech said a large chunk of these were parked with PSU banks in India.
“Bulk of the money has been moved from mutual funds to fixed deposits largely with the public sector banks,” HCL Technologies executive vice-president (Finance) Anil Chanana has said.
The company has $54 million with the SBI, $51.3 million in HDFC Bank and $20.5 million in Canara Bank.
However, the cash reserve of Rs20,000 crore is despite the fact that the Indian IT firms have aggressively made big acquisitions, which have drawn down their kitty.
Wipro had acquired Citi Technology Services for $127 million (about Rs620 crore ) in all cash deal.
TCS would have seen a dent in its cash reserve after the acquisition of Citi Group Global services for $512 million (about Rs2,501 crore). However, HCL’s £441 million (Rs3,144 crore) acquisition of Axon was funded mainly through debt, leaving its cash reserve intact.