Top Debt Free Companies listed in BSE/NSE in India 2019

debt free companies in india

Analysts and investors like stocks of debt free companies. Why? Because in the process of intrinsic value estimation of stocks, debt plays a decisive role. In this blog post we will try to see the debt of companies through the lenses of intrinsic value.

Sounds interesting right? But what does it mean, and how will I go about it?To understand this, one must first know about two things:

  • First, what type of debt a company can avail? 
  • Second, why company avail these debts?

There are two types of debts visible in companies balance sheets:

  • Short term debt (current liability).
  • Long term debt (non-current liability). 

Companies generally resort to short term debt to manage their immediate cash flow needs.

Short term debts give liquidity to companies working capital (WC). 

Stocks Analysis Worksheet - Plus - Basket

Which debts are of short term in nature?

Those debts, which the company will settle within next 12 months from the date of incurring.

How short term debt effects intrinsic value?

Short term debt does not negatively effect the intrinsic value a lot. How?

To understand this, lets know a bit of maths about intrinsic value.

Intrinsic value is dependent on free cash flow (FCFE)

Higher will be the free cash flow (FCFE), more will be the intrinsic value. 

What is free cash flow?

FCFE = PAT – [Capex – D&A] – Increase in WC + (Net LT Debt).

How short term debt effects this FCFE equation?

Short term debt will have two effets:

  • It will not increase working capital (WC).
  • But it will reduce PAT by a very small amount. 

Why PAT will reduce? Due to increased “interest” expense. 

But as it is a short term debt (period <12 months), interest expense will be too small to cause any major harm to FCFE. 

Overall the FCFE will reduce due to short term debt, but the change will be too small. 


  • PAT = Rs.4,108 Crore.
  • Short term debt = Rs.669.88 Crore.
  • Interest expense @8% = Rs.55.6 Crore.
  • Reduced PAT = Rs.4,055 Crore (98.7% of PAT).

The effect of short term debt on FCFE (hence intrinsic value) is shown below:

Debt Free Companies _ IV Formula

[Note: New Debt – Debt Repaid, talks only about long term debts]

Why there is no increase in working capital?

Because a new short term debt (of say $100) will add to both current assets and current liability. 

  • Current Asset (CA)
    • Increase Cash ($100)
  • Current Liability (CL)
    • Increase in Borrowings ($100)

Increase in working capital = Increase in CA – Increase in CL

Debt free companies and short term debt.

How does the above analysis on short term debt compliments our topic of “debt free companies”?

As free cash flow (FCFE) is not effected by short term debts, its impact on intrinsic value is also small.

So does it mean that a company can take as much short term debt as it wants? No.

If the level of short term debt crosses a limit, it might lead to problems in repayment. 

How to define this limit?

Short term debt / Cash and Cash Equivalent < 1


So if a company satisfies the Formula_1, it can be treated as good as a debt free company. 

How long term debt effects companies intrinsic value

The impact of long term (LT) debt is more visible on intrinsic value of a company. Why?

FCFE = PAT – [Capex – D&A] – Increase in WC + (Net LT Debt).

There are two reasons for it:

First, Compare to PAT, LT debts are bigger in size than short term debt.

Hence the impact of its “interest expense” on PAT is more significant.

Second, LT debt directly increases the FCFE (see the above FCFE formula). 

The net effect of LT debt is, it always increases the FCFE.


  • PAT = Rs.4,108 Crore.
  • LT debt = Rs.24,568 Crore.
  • Interest expense @8% = Rs.1,965 Crore.
  • Reduced PAT = Rs.2,142 Crore.

FCFE = Reduced PAT – (Net Capex) – Increase in EC + New LT Debt. 

FCFE before LT debt (LT debt = 0)

FCFE = 4108 – (Net Capex) – Increase in EC + 0 = Rs. (4,108 – K) Crores.

FCFE after LT debt.

FCFE = 2,142 – (Net Capex) – Increase in EC + 24,568 = Rs. (26,710 – K) Crores.

What we can understand from this example?

LT debt can significantly increase the free cash flow (FCFE), irrespective of its negative effect on PAT (reduced PAT). 

Debt free companies and short term debt.

How does the above analysis on long term debt compliments our topic of “debt free companies”?

The above FCFE calculation shows that, the bigger is the LT debt, higher will be the FCFE.

But does it means that a company can take as much LT debt as it likes?

No, too much LT debt will make the firm too susceptible to bankruptcy. 

LT debt must not cross a safe limit. 

What is that limit? 

To identify debt free companies, I use the below three (3) screeners:

Total Debt minus Cash < 0 (negative).


Use of this formula will supersede the formula_1.

Total Debt / Equity ratio < 0.25


Total Debt / Total Asset < 0.20


What we can conclude from this analysis?

A company which satisfies the above 3 formulas are as good as debt free companies. 

They may not be a zero debt company, but their debt level is so low that they can still earn the tag of a “debt free company”.

Debt Free Companies & Debt minus Cash…

Let me introduce a concept of “Enterprise Value”.

To understand this lets take a small hypothetical example.

Suppose there are two companies ABC & XYZ.

ABC has a debt of Rs.80 Crore and B has a debt of Rs.120 Crore.

Which company looks better here?

If we have to look only at debt levels, Company ABC looks less risky.

Now suppose, Networth of ABC is Rs.80 Crore and Net worth of XYZ is Rs.120 Crore.

Means, the debt equity ratio (D/E) of ABC is 1 (80/80) and that of XYZ is also 1 (120/120).

So which company is better?

Debt/Equity ratio being a very reliable debt burden indicator is not able to differentiate between ABC & XYZ.

What to do?

There is a way out.

Suppose Company ABC and XYZ has a cash/cash equivalent reserves of Rs.75 Crore and Rs.132 Crore respectively.

Debt -(minus) Cash for Company ABC is = Rs.5 Crore (80-75).

Debt –(minus) Cash for Company XYZ is = Rs.-12 Crore (120-132).

A negative value for Company XYZ indicates that company is having enough cash to pay-off all its debt.

Hence, even if companies like XYZ is carrying high debt (Rs.120 Crore), they are still as good as zero debt companies. Why?

This is because XYZ also has enough cash reserves (Rs.132 Crore) to negate its debt burden.

Such companies (like XYZ), whose Debt minus Cash value is negative, can be included in our list of debt free companies.

In stock metric terms, we will use the Enterprise Value and Market Cap to understand how big is the cash reserves of a company compared to its debt.

Enterprise Value minus Market Capitalisation = Debt – Cash

Example: In the below list of companies, you will note that companies like Interglobe Aviation, ICICI Securities, has a debt/equity ratio of 0.35 & 0.81 respectively. They have still been included in the list. This is because of negative “Debt minus Cash” component.

[Note: If you want to know more about Enterprise value, check this link….]

List of Top Debt Free Companies in India – 2019

(Updated for: February’2019)

SLCompany(Debt – Cash) / AssetDebt Equity RatioDebt Asset Ratio
1Max Financial Services Ltd.-2.3700.00
2Rites Ltd.-1.570.030.02
3Coal India Ltd.-1.410.080.07
4GE Power India Ltd.-1.2700.00
5NBCC India Ltd.-1.2600.00
6Interglobe Aviation Ltd.-1.100.350.26
7Engineers India Ltd.-1.0900.00
8Indian Energy Exchange Ltd.-1.0800.00
9Glaxosmithkline Consumer Healthcare Ltd.-1.0300.00
10Cochin Shipyard Ltd.-
11India Tourism Devp. Corpn. Ltd.-0.9900.00
12Hindustan Unilever Ltd.-0.8700.00
13KIOCL Ltd-0.8700.00
14BSE Ltd.-0.8000.00
15Moil Ltd.-0.7700.00
16Castrol India Ltd.-0.7700.00
17Zydus Wellness Ltd.-0.750.040.03
18Pfizer Ltd.-0.6600.00
19Honeywell Automation India Ltd.-0.6500.00
20Sonata Software Ltd.-0.650.050.05
21Info Edge (India) Ltd.-0.6400.00
22Glaxosmithkline Pharmaceuticals Ltd.-0.6300.00
23Hindustan Zinc Ltd.-0.6200.00
24Bajaj Consumer Care Ltd.-0.610.030.03
25Lakshmi Machine Works Ltd.-0.5900.00
26Dr. Lal Pathlabs Ltd.-0.5800.00
27Kaveri Seed Company Ltd.-0.5800.00
28Sun Pharma Advanced Research Company Ltd.-0.570.020.01
29Vakrangee Ltd.-0.5700.00
30Oracle Financial Services Software Ltd.-0.5600.00
31Tata Sponge Iron Ltd.-0.5600.00
32ICICI Securities Ltd.-0.550.810.45
33Whirlpool Of India Ltd.-0.5500.00
34Bandhan Bank Ltd.-0.540.030.03
35Avanti Feeds Ltd.-0.540.010.01
36Tata Elxsi Ltd.-0.5300.00
37Wabco India Ltd.-0.5300.00
38Monsanto India Ltd.-0.5100.00
393M India Ltd.-0.500.010.01
40Unichem Laboratories Ltd.-0.500.060.05
43eClerx Services Ltd-0.490.010.01
44Schaeffler India Ltd.-0.4900.00
45CARE Ratings Ltd.-0.4900.00
46Merck Ltd.-0.4700.00
47Hero Motocorp Ltd.-0.460.020.02
48Akzo Nobel India Ltd.-0.4500.00
49Siemens Ltd.-0.4400.00
50Hindustan Aeronautics Ltd.-0.440.080.07
51Thermax Ltd.-0.430.090.08
52NIIT Technologies Ltd.-0.420.010.01
53SKF India Ltd.-0.420.050.04
54Larsen & Toubro Infotech Ltd.-0.4200.00
55Jubilant FoodWorks Ltd.-0.4100.00
56Infosys Ltd.-0.4000.00
57Sun TV Network Ltd.-0.4000.00
58Bata India Ltd.-0.4000.00
59Indraprastha Gas Ltd.-0.4000.00
60AIA Engineering Ltd.-0.390.040.04
61Persistent Systems Ltd.-0.3900.00
62Symphony Ltd.-0.390.040.04
63Bharti Infratel Ltd.-0.3900.00
64Havells India Ltd.-0.380.030.03
65TeamLease Services Ltd.-0.370.020.02
66Mahanagar Gas Ltd.-0.3700.00
67Praj Industries Ltd.-0.360.010.01
68Rajesh Exports Ltd.-0.361.220.55
69Sanofi India Ltd.-0.3600.00
70Bharat Heavy Electricals Ltd.-0.3400.00
71Suven Life Sciences Ltd.-0.340.040.03
72Gillette India Ltd.-0.3400.00
73Escorts Ltd.-0.340.020.02
74GE T&D India Ltd.-0.340.080.08
75Central Depository Services (India) Ltd.-0.3300.00
76Balmer Lawrie & Co. Ltd.-0.330.010.01
77FDC Ltd.-0.3300.00
78Finolex Cables Ltd.-0.3300.00
79Divi’s Laboratories Ltd.-0.320.010.01
80Delta Corp Ltd.-0.3200.00
81National Aluminium Co. Ltd.-0.3100.00
82Bajaj Auto Ltd-0.310.010.01
83Pidilite Industries Ltd.-0.310.030.03
84Mphasis Ltd.-0.300.070.07
85Reliance Nippon Life Asset Management Limited.-0.3000.00
86Cyient Limited-0.300.120.11
87TV Today Network Ltd.-0.3000.00
88Bharat Dynamics Ltd.-0.3000.00
89Ambuja Cements Ltd.-0.3000.00
90Colgate-Palmolive (India) Ltd.-0.3000.00
91Petronet LNG Ltd.-0.300.150.13
92ACC Ltd.-0.2900.00
93Bosch Ltd.-0.2800.00
94Grindwell Norton Ltd.-0.2700.00
95ABB Ltd.-
96Hexaware Technologies Ltd.-0.2700.00
97Graphite India Ltd.-
98Kansai Nerolac Paints Ltd.-
99Sheela Foam Ltd.-
100JB Chemicals & Pharmaceuticals Ltd.-
101Crisil Ltd.-0.2600.00
102Greaves Cotton Ltd.-0.2600.00
103TI Financial Holdings Ltd.-
104ITC Ltd.-0.2600.00
105Wipro Ltd.-
106MindTree Ltd.-
107Page Industries Ltd.-
108Eicher Motors Ltd.-
109Britannia Industries Ltd.-
110Navin Fluorine International Ltd.-
111Caplin Point Lab-0.2300.00
112Thyrocare Technologies Ltd.-
113IFB Industries Ltd.-
114Karur Vysya Bank Ltd.-0.220.380.28
115Exide Industries Ltd.-

P.Note: The above list of stocks has been evaluated on the parameter of the debt burden they carries. But the analysis is  based on only rough estimates.

I prefer to do a deeper analysis of my shortlisted stocks using my stocks analysis worksheet

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Hi. I’m Mani, I’m an Engineering graduate who in pursuit of financial independence, has converted into a full time blogger. After working in the corporate world for almost 16+ years, I bid it more

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      • Sir earlier there were excel sheets of these debt companies, fastest growing companies and highest return on capital companies. Can you please start uploading those excel sheets again? They become handy and useful. Thanks

  1. its very informative sir. it helped me a lot as i am starting beginner , the information about fundametals of company is most important auspect for investment in equity market. plz continue your valuable research on financial market


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