Debt-free firms make up 57% of all market cap: Why Dalal Street loves them

Despite such heavy weightage in overall corporate worth, these companies account for just a quarter of revenues and assets

Dalal Street shows a special preference for companies that stay away from debt and fund their operations largely from internal accruals. Debt-free companies (on net debt basis) account for 57 per cent of all market capitalisation of listed non-financial companies even though these companies are in a minority in terms of revenues, assets and net profits.

In all, 209 non-financial companies out of a total sample of 594 companies were debt-free at the end of 2017-18 and together they accounted for 25.6 per cent of the sample companies' combined net sales, 22.7 per cent of all assets and 46.5 per