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ITC builds up Rs 1,000-cr moneybag
Hindustan Times - 18 Jul 2003

Suman Layak

ITC LTD, the Kolkata based cigarettes major, is sitting on a pool of liquidity worth around Rs 1,000 crore.

The kitty was swelled by almost 750 per cent in 2002-03 and the jump looks in sync with the company’s plans for acquisitions and greenfield investments.

The major portion of the moneybag is held as current investments and the rest as cash.

ITC had Rs 673 crore parked in current investments by the end of financial year 2002-03, a more than 750 per cent jump on Rs 78 crore left at the end of 2001-02.

The company has also ended the year with Rs 378 crore of closing cash and equivalents against only Rs 44.6 crore in 2001-02, again a jump of 750 per cent.

The total investments of ITC Ltd too have gone up as a result of this jump in the current investments to Rs 906 crore in 2001-02.

In 2002-03 the company enjoyed a healthy cash flow with cash generated from operations going up by eight per cent.

In the kitty

At the end of financial year

Cash in hand and bank

Current Investments

2000-01

35.41

-

2001-02

44.21

78.01

2002-03

378.84

673.81

(All figures in Rs crore)    

Most of the current investment of ITC has been in various cash management funds and liquid funds and liquid growth funds. The current investments are now 41 per cent of the total investment of ITC Ltd including investments in various subsidiaries.

Of the Rs 673 crore, around Rs 150 crore has been parked in UTI’s growth bonds, while around Rs 200 crore is with various funds managed by Templeton.

The rest is divided among funds managed by Alliance, Birla, Chola, HDFC, IDBI Principal, Prudential ICICI, Kotak Mahindra, Zurich and others.

ITC has already outlined plans for acquisitions in the specialty paper and paperboard industry. There have been market rumours that the company is in talks with Ballarpur Industries.

The company may also go in for greenfield investments in paper and is also looking at a farm forestry project.

The other area where ITC is looking to invest is lifestyle retailing where the company is planning to expand its presence to the foreign market.

The company is also looking at investments in the new business areas, especially the FMCG sector that is not likely to turn profitable in the next few years.

The company has entered segments like branded packaged foods.