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In present environment, many don't wish to commit to projects; many that have committed are finding the progress stymied.

India Inc (excluding trading and financial services companies) was sitting on a cash mountain of Rs 456,700 crore (Rs 4,567 billion) as on September 30, up 21 per cent from the same time a year before.

Adding back the investment of Rs 114,000 crore (Rs 1,140 billion) in liquid schemes of mutual funds, the total cash pile is Rs 570,700 crore (Rs 5,707 billion), or 34.7 per cent of total debt.

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The figure has swelled partly through money raised through public offers and private placement, stake sale to strategic investors and unused cash generated through internal accrual (net profit) after making provision for ongoing capex plans.

During the 12 months, India Inc raised Rs 55,500 crore (Rs 555 billion) through public issues and private placement to qualified institutional bidders.

Nilesh Shah, president-corporate banking, Axis Bank, said the cash in hand for India Inc was for various reasons.

He expects cash rich PSUs to declare higher dividend while firms in technology, pharma and fast moving consumer goods sector, which are sitting on cash, would look at acquisition opportunity.

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He believes metal and power sectors, which are sitting on cash as their projects are under way and are getting slowed due to various issues, are likely to use cash for which it has been committed.

Some of these companies have kept cash as margin money or security deposit for project delivery.

The 22 listed PSUs alone have Rs 205,255 crore (Rs 2,052 billion) of cash and bank balances accounting for 82 per cent of aggregate debt.

The list is headed by Coal India, sitting on cash of Rs 54,980 crore (Rs 549.8 billion), followed by oil giant ONGC (Rs 27,442 crore or Rs 274.42 billion).

Reliance Industries holds cash worth Rs 36,501 crore (Rs 365.01 billion), part of it (Rs 9,000 crore or Rs 90 billion so far) through a 30 per cent stake sale in 23 oil and gas production sharing contracts to BP for $7.2 billion. 

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A Coal India spokesperson said the company expected to accumulate Rs 60,000 crore (Rs 600 billion) in cash reserves by the end of the current financial year through strong growth in net profit, on account of an increase in interest income from accumulated cash.

The company expects to deploy this cash in building coal washeries, which will enable them to sell better-quality coal.

Also, the company needs to create railway linkages to at least four coal fields.

Most companies sitting on cash know that their cash balance is diluting their return on equity, said Shah.

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These balances don't yield return as much as the business.

They accumulate cash to tide over business cycles and provide margin of safety for a downturn.

They also keep cash for acquisition and diversification. It seems the companies are looking for greater certainty and signs of a permanent increase in sales before they let go their hoards.

As the global crisis has accentuated, India Inc is playing safe and holding back any major capital expenditure, said Kamlesh Kotak, head, equity research, Asian Market Securities.

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"The uncertain domestic macro environment and policy-related issues that led to stalling of major projects also weigh against key investments in segments like power, roads and metals," he said.

He indicated that it makes sense for cash-rich companies to tread safe in terms of slowing their expansion till more clarity emerges on demand.

"Companies would prefer to play the float, benefiting from surplus cash that can yield extra return, rather than committing higher capital when the demand scenario is not clear," he said.

The trend is reflected in the latest balance sheet numbers.

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Barring infrastructure and construction companies, Kotak said, most marked lower debt to equity and higher cash balances.

Capex across power, telecom, metal and cement sectors has witnessed acute slowdown.

Biggies like Infosys, TCS, Coal India and ONGC either do not have any major capex on the anvil or await suitable merger and acquisition opportunities.

In the case of Reliance Industries, the cash pile will be significantly higher once cash from BP flows in.