Debt Free Companies: Do They Really Bring Huge Profits???

Top Debt Free Companies in India

Debts are an integral part of finances. Almost everybody at some point in time had debts on them. But have you ever felt the sense of freedom you get when you have cleared all your debts? Isn’t that a great feeling? Indeed it is.

Similarly, a company cannot simply grow on its limited capital. They need extra money, and one way to raise additional capital is through debts. It is sort of a loan which can be directly affecting the profits.

Some companies perform and manage their finances well, and are completely debt-free.

This article will help you learn about India’s Top 10 debt-free companies in 2021, the pros and cons of a debt-free company, and cash-rich companies in India.

What Does Debt Free Company Mean?

A company can be considered debt-free if there is zero debt in its balance sheet. Companies like these don’t have any outstanding loans and have more control over their finances. They are more self-reliant and can make swift decisions.

Generally, a debt-free company is considered a good company, as they have fewer liabilities to cover and can invest their funds for the company’s better performance.

Top 10 Debt-Free Companies in India 2021

The below is a list of the zero debt companies with the largest market capitalization. 

SL No Company’s Name Market Capital (Crores) Net Profit Quarterly (Crores) Sales Quarterly (Crores) Total Debt (Crores)
1 SBI Life Insurance Company Ltd 91016.45 232.85 26717.85 0
2 HDFC AMC Ltd 62863.02 369.26 481.86 0
3 P & G Hygiene and Health Care Ltd 43051.54 250.62 1018.44 0
4 General Insurance Corporation of India 37140.65 931.35 11780.13 0
5 Bharat Electronics Ltd 31651.34 278.05 2320.39 0
6 ABB India Ltd 29251.83 57.56 1700.76 0
7 IRCTC Ltd 27694.4 78.09 224.37 0
8 Whirlpool India Ltd 27625.94 64.37 1493.98 0
9 New India Assurance Company Ltd Company Ltd 26516.32 524.93 8592.78 0
10 Trent Ltd 25922.15 73.94 853.63 0

1. SBI Life Insurance Company Ltd

SBI Life Insurance Company Ltd dates back to October 2000, even though it was registered in March 2001 with India’s Insurance Regulatory and Development Authority (IRDAI).

This company is an amalgamation of India’s largest bank (SBI) with a 62.1% stake and BNP Paribas Cardif from France with a 22% stake in the company.

SBI Life Insurance Company Ltd has the largest market capitalization of Rs.91016.45 Crores and a quarterly net profit of Rs.232.85 Crores. 

2. HDFC AMC Ltd

Started in 1999, HDFC AMC Ltd is a joint venture between Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited (SLI).

It is an asset management company and manages the HDFC Mutual Fund schemes. 

They know how to manage their assets and debts as they have come out as a zero debt company in just two years of launching their IPO. The company is currently 26.1% owned by the public. 

3. P & G Hygiene and Health Care Ltd

One of the top players in the FMCG Sector in the Indian Markets, it has successfully carried its legacy for about 180 years. There’s a good chance you might be using one of their products.

Being one of the debt-free companies that pay dividends, their market cap is Rs.43051.54 Crores with a quarterly net profit of Rs.250.62 Crores.

4. General Insurance Corporation of India

General Insurance Corporation of India (GIC) came into existence in November 1972 to control and superintend the Indian insurance businesses.

Around 55 Indian Insurance companies were merged into GIC. It is one of the debt-free companies with a quarterly net profit of Rs.931.35 Crores and a market cap of Rs.37140.65 Crores. 

5. Bharat Electronics Ltd

Bharat Electronics Ltd is a Navratna Company primarily into manufacturing advanced electronics and aerospace products pf Indian Armed Forces. It was founded in 1954 in Bangalore. 

Since then, BEL has designed and manufactured numerous things for our defense forces. The company was valued to be having a turnover of Rs.1 Billion back in 1982. In 2021 they made a quarterly net profit of Rs.278.05 Crores with a Market Cap of Rs.31651.34 Crores.

6. ABB India Ltd

ABB India Ltd is again a joint venture between Hindustan Brown Boveri and Asea Ltd. They mainly operate in Robotics and Heavy electrical equipment, and automation technology. 

ABB was a part of Fortune Global 500 companies in 2018. Their net quarterly profit is Rs.57.56 Crores with a market cap of Rs.29251 Crores.

7. IRCTC Ltd

If you are an Indian who traveled in Indian Railways, you must have heard about IRCTC. Incorporated on 27th September 1999, IRCTC is a Mini Ratna, a central public sector enterprise under the Ministry of Railways. 

IRCTC takes care of Catering & Hospitality, Internet Ticketing, Travel and Tourism, and packaged drinking water (Rail Neer). Their quarterly net profit is Rs.78.09 Crores with a market cap of Rs.27694.4 Crores.

8. Whirlpool India Ltd

Whirlpool needs no introduction, and they are the leading manufacturers and marketers of home appliances like refrigerators, washing machines, microwave ovens, etc., in numerous countries for more than a century now.

They are one of the large-scale debt-free companies with a quarterly net profit of Rs.64.37 Crores with a market cap of Rs.27625.94 Crores.

9. New India Assurance Company Ltd

The incorporation of New India Assurance Company Ltd dates back to 1919 on 23rd July by Sir Dorab Tata and was nationalized in 1973. They are a direct subsidiary of GIC now. 

New India Assurance Company Ltd was the first to introduce aviation, shipping, and satellite insurance. With a quarterly net profit of Rs.524 Crores and a market cap of Rs.26516.32 Crores, New India Assurance is one of the zero debt companies.

10. Trent Ltd

A subsidiary of the Tata Group and India’s leading players in the retail industry. The company has four branded retail stores across the country, namely Westside & Zudio (Fashion apparels), Star (Food and Grocery), and Landmark (Family Entertainment).

The company’s quarterly net profit is Rs.73.94 Crores and the market cap of Rs.25922.15 Crores.

Debt Free Penny Stocks in India

The below table represents the debt-free penny stocks in India In 2021

SL No Company’s Name Current Market Price (Rs) Market Capital (Crores) Net Profit Quarterly (Crores) Total Debt (Crores)
1 Raghunath International Ltd 3.89 1.95 0.57 0
2 Wellness Noni Ltd 5.52 1.77 0.28 0
3 Enterprise International Ltd 6.62 1.98 0.43 0
4 DRA Consultants Ltd 8.15 8.94 0.01
5 Comfort Intech Ltd 8.74 27.96 3.19 0.19
6 Comfort Commotrade Ltd 9 9.02 10.04 0.01
7 Pulz Electronics Ltd 9.75 5.32 0.24 0.06
8 Titan Securities Ltd 10.38 25.97 2.68 0
9 Madhusudan Industries Ltd 10.5 5.65 1.89 0
10 Som Datt Finance Corporation Ltd 12.71 12.72 1.73 0

1. Raghunath International Ltd

Raghunath International Ltd is a manufacturer and marketer of pan masala, gutkha, and mouth fresheners. They launched their IPO in 1995, and after the ban of Pan Masala in several states, they entered the real estate market. The company is one of the debt-free penny stocks in India in 2021.

2. Wellness Noni Ltd

Wellness Noni Ltd was incorporated in 1992 and manufactures Noni Juices, which has many medicinal properties. They are also one of the debt-free penny stocks in India 2021.

3. Enterprise International Ltd

Enterprise International Ltd is one of the best businesses to provide textiles goods mainly of silk fabrics. They were incorporated in 1989, and since then, they have grown to be one of the zero-debt companies. 

The company is constantly growing and entering the market of Packaged and processed food. 

4. DRA Consultants Ltd

DRA Consultants Ltd is a consultancy firm providing a wide range of services in the Urban Living and industrial sectors. They were incorporated in 1990 and are an ISO 9001:2008 certified company. They have a market cap of Rs.8.94 Crores and are one of the debt-free penny stocks in India.

5. Comfort Intech Ltd

Comfort Intech Ltd is a non-banking finance company providing corporate, personal, and shares & security loans. With a market cap of Rs.27.96 crores and a quarterly net profit of Rs.3.19 Crores, they are one of India’s top debt-free penny stocks in 2021.

6. Comfort Commotrade Ltd

Comfort Commotrade is a company that is into commodity broking and is a member of MCX and NCDEX. They were incorporated in 2007 and are one of the zero-debt companies.

7. Pulz Electronics Ltd

Pulz Electronics is into developing and manufacturing high-quality audio systems. The company was established 35 years ago. They are a public listed company now and are one of the top debt-free penny stocks in India, with a market capitalization of Rs.5.32 Crores.

8. Titan Securities Ltd

Titan Securities Ltd was established as a Public Limited Company in 1993. They provide financial services such as loans, investment in securities, etc. The company is growing well and is one of India’s top debt-free penny stocks. 

9. Madhusudan Industries Ltd

Madhusudan Industries Ltd is a fast-growing edible oil and horticulture business in India. They deal in Vegetable oils, laundry soaps, flowers, etc. Their quarterly net profit is Rs.1.89 Crores and has a market cap of Rs.5.65 Crores.

10. Som Datt Finance Corporation Ltd

It is an NBFC (Non-Banking Financial Company) with RBI. Som Datt Financial Corporation is into investing in stocks and securities. They are also one of the zero debt companies in India.

Cash Rich Companies in India

SL No Company’s Name Current Market Price (Rs) Market Capital (Crores) Total Debt (Crores) Cash End of Preceding Year (Crores) Free Cash Flow Preceding Year (Crores)
1 SBI Life Insurance Company Ltd 910.1 91016.45 0 2420.63 13331.65
2 General Insurance Corporation of India 211.7 37140.65 0 12933.14 7564.36
3 Sun TV Network Ltd 493.45 19446.11 0 593 1269.69
4 HDFC AMC Ltd 2951.95 62863.02 0 31.99 876.64
5 Bharat Electronics Ltd 129.9 31651.34 0 971.87 784.93
6 Castrol India Ltd 125 12364.03 0 946 780.19
7 NBCC (India) Ltd 46.65 8397 0 5092.82 632.67
8 ABB India Ltd 1380.4 29251.83 0 1597.57 545.4
9 IRCTC Ltd 1730.9 27694.4 0 1140.04 445.1
10 CRISIL Ltd 1842.45 13391.19 0 345.58 418.18

1. SBI Life Insurance Company Ltd

SBI Life Insurance Company Ltd dates back from October 2000, even though it was registered in March 2001 with India’s Insurance Regulatory and Development Authority (IRDAI).

This company is an amalgamation of India’s largest bank (SBI) with a 62.1% stake and BNP Paribas Cardif from France with a 22% stake in the company. SBI Life Insurance Company Ltd has the largest market capitalization of Rs.91016.45 Crores and a quarterly net profit of Rs.232.85 Crores. 

2. General Insurance Corporation of India

General Insurance Corporation of India was formed in November 1972 to control and superintend the insurance businesses in India.

Around 55 Indian Insurance companies were merged into GIC. It is one of the debt-free companies with a quarterly net profit of Rs.931.35 Crores and a market cap of Rs.37140.65 Crores. 

3. SUN TV Network Ltd

Sun TV Network Ltd is one of India’s largest mass media companies. Incorporated in 1992, they own around 33 channels in different languages, with SUN TV being the flagship Tamil channel. 

They are also the owner of the IPL team Sunrisers Hyderabad. They have a market capitalization of Rs.19446.11 Crores and have a free cash flow of Rs.1269.69 Crores. This company is one of the debt-free cash-rich companies in India.

4. HDFC AMC Ltd

Started in 1999, HDFC AMC Ltd is a joint venture between Housing Development Finance Corporation Limited (HDFC) and Standard Life Investments Limited (SLI). It is an asset management company and manages the HDFC Mutual Fund schemes. 

They clearly know how to manage their assets and debts as they have come out as a zero debt company in just two years of launching their IPO. The company is currently 26.1% owned by the public. 

5. Bharat Electronics Ltd

Bharat Electronics Ltd is a Navratna Company primarily into manufacturing advanced electronics and aerospace products pf Indian Armed Forces. It was founded in 1954 in Bangalore. 

Since then, BEL has designed and manufactured numerous things for our defense forces. The company was valued to be having a turnover of Rs.1 Billion back in 1982. In 2021 they made a quarterly net profit of Rs.278.05 Crores with a Market Cap of Rs.31651.34 Crores.

6. Castrol India Ltd

Castrol is a brand that is familiar to almost every Indian. They are the leading automobile and industrial lubricant manufacturing company in India. 

With more than 20% market share, they are the 2nd most significant industrial and automobile lubricant manufacturer and marketer. Their market cap is Rs.12364.03 Crores with a free cash flow of Rs.780.19 Crores.

7. NBCC (India) Ltd

NBCC stands for National Building and Construction Corporation. NBCC is a Navratna Company of the Indian Government. They mainly focus on Project Management Consultancy, Engineering, Procurement and Construction, Real Estate Development.

The company is one of the debt-free cash-rich companies in India with a market cap of Rs.8397 Crores and a free cash flow of Rs.632.67 Crores.

8. ABB India Ltd

ABB India Ltd is again a joint venture between Hindustan Brown Boveri and Asea Ltd. They mainly operate in Robotics and Heavy electrical equipment, and automation technology. 

ABB was a part of Fortune Global 500 companies in 2018. Their net quarterly profit is Rs.57.56 Crores with a market cap of Rs.29251 Crores.

9. IRCTC Ltd

If you are an Indian who traveled in Indian Railways, you must have heard about IRCTC. Incorporated on 27th September 1999, IRCTC is a Mini Ratna, a central public sector enterprise under the Ministry of Railways. 

IRCTC takes care of Catering & Hospitality, Internet Ticketing, Travel and Tourism, and packaged drinking water (Rail Neer). Their quarterly net profit is Rs.78.09 Crores with a market cap of Rs.27694.4 Crores.

10. CRISIL Ltd

Those of you who are familiar with the stock market might have heard about CRISIL. It is a global analytic company providing ratings, data analytics, and researches about various organizations. S&P Global Inc owns CRISIL.

This company is also a debt-free cash-rich Company in India. The market cap of CRISIL is Rs.13391.19 Crores with a free cash flow of Rs.4418.18 Crores.

Top Advantages & Disadvantages of Debt-Free Companies

Nothing is perfect in this world, and everything has its pros and cons. The same goes for Debt-free companies.

What are they?

Well, keep reading, and you will learn about the pros and cons of a debt-free company.

Advantages of Debt-Free Company

  • Being debt-free means being free from interest payments on loans and debts.
  • Debt-free companies have strong financials and have less chance of going bankrupt.
  • Debt-free companies can handle economic slowdown as they have low outgoing expenses.

Disadvantages of Debt-Free Company

  • If a company opts for equity financing over debt, it may end up paying higher taxes. Equity financing is the capital raised by sale of shares.
  • If equity financing is preferred over Debts, then there will be a low earning per share (EPS) Ratio.

Disclaimer: The above article is written for educational purposes and the companies’ data mentioned in the article may change with respect to time.

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