There are many ways through which you can determine the financial existence of a company. And among them, the major factor will be debt. A company with a high debt balance is considered to be financially unhealthy, while one with a low debt balance or zero debt is considered to be financially reliable. A zero debt company is one that does not have any external borrowings. When a company does not show any outstanding loans on the balance sheet, it is called a “debt-free company.” Such companies are considered self-reliant and have a better financial standing.
With the advent of the pandemic, there has been a necessary shift in the financials of companies in the past two years. Indian companies are coming on to the revival stage and showcasing a positive outlook. Best investment tools in India prefer debt-free companies shares for safe investment.
Advantages of Debt-Free Companies
The advantages of being a debt-free companies in India:
- As a debt free company with good financials, they are good to do business with as there are fewer chances of them going bankrupt.
- They have no interest payments.
- Their fixed outgoings are on the lower side, so they are flexible enough to handle recessions and other economic slowdowns.
- Better and higher profit margins
- Lower break even point.
Disadvantages of Debt-Free Companies
The disadvantages of debt-free companies in India:
- If the company is trying to raise funding via equity, then they will have a low earnings per share ratio.
- Companies with zero-debt have higher financing charges.
- Companies planning to finance through equity trading pay higher taxes.
In this article, we are going to list the top debt-free companies in India.
Read More : Expert Advice For Your Small Business Debt
1. TCS ( Tata Consultancy Services)
TCS is a branch out of the TATA company and is one of the biggest IT service companies in India. It has its headquarters in Mumbai. Their services extend to consulting, IT services, and business solutions. It is India’s second largest company concerning market capitalization and is ranked in the Forbes list of the most innovative companies in the world.
2. Infosys
Infosys is the second largest IT company in India. They are the leading providers of business consulting services, information technology, and outsourcing services. It was founded in Pune and is now headquartered in Bangalore. They are considered to be the global leader in digital services and consulting.
3. SBI Life Insurance Company
It is an insurance subsidiary of SBI Banking. SBI Insurance was incorporated in the year 2000 and started off initially as a collaboration between SBI and BNP Paribas Cardif. SBI has a 55.50% stake in the company, and BNP Paribas has 0.22%.
SBI Life Insurance is listed on both the NSE and the BSE. And it is one of the leading insurance companies in India.
4. Hindustan Unilever
Hindustan Unilever is the largest FMCG company in India. It is a subsidiary company of the British company, Unilever. They have an extensive portfolio of products ranging from cosmetics, beverages, personal care, cleaning agents, water purifiers, etc. They are headquartered in Mumbai.
5. ITC
ITC is a conglomerate company that is headquartered in Kolkata. ITC is popularly known as the paper giant, with extensive investments in the hotel industry as well. Their diverse portfolio includes FMCG, hotels, packaging, paperboards, etc. They have around 13 segments under 5 companies.
6. Divi’s laboratories
Divi’s Laboratories is an Indian multinational pharmaceutical company and producer of active pharmaceutical ingredients. It is headquartered in Hyderabad, Telangana. They are engaged in the manufacturing of generic APIs, nutraceutical ingredients, and intermediates.
7. IRCTC
IRCTC is a Indian government owned corporation with a monopoly in railway ticketing services, catering services, and tourism services, for the Indian Railways. It was established or incorporated in the year 1999.
8. Gland Pharma
Gland Pharma is one of the biggest manufacturers of injectables. They have a business to business model and have business in over 50 countries. It is one of the fastest growing manufacturers in their industry and focused on providing credible services to companies worldwide.
9. Larsen and Toubro
They are commonly known as L & T and have their prime interests in engineering, construction, manufacturing, information technology, financial services, etc. They are headquartered in Mumbai. It is among the top five construction companies in the world. They are accounted to as India’s premier infrastructure developers.
10. Bharat Electronics
Bharat Electronics is a government-owned aerospace and defense electronics company. It is a well-known player in the said industry. They advanced electronic products mainly for aerospace applications.