Infosys’ investments in debt MFs increased during the December quarter even as its total cash chest remained almost unchanged at Rs22,501 crore
New Delhi: The country’s most cash-rich IT company Infosys has ramped up its investments in debt mutual funds (MFs) to an all-time high of Rs7,365 crore, while paring its bank deposits to the lowest level since June 2010, reports PTI.
The tech major's investments in debt MFs increased during the last quarter ended 31 December 2012, even as its total cash chest remained almost unchanged stood at Rs22,501 crore from the previous quarter level.
After rising sharply in the July-September 2012 quarter to Rs4,986 crore, Infosys’ investments in debt-focussed liquid MF schemes rose even further to Rs7,365 crore as on 31 December 2012.
Large corporates use liquid debt MFs to park cash for short-term and also earn good returns, while waiting to deploy the funds for future projects.
At over Rs7,000 crore, Infosys’ current investment level in liquid mutual funds is the highest-ever for the debt-free firm. The previous record high level for its exposure to liquid MFs was Rs5,200 crore in December 2009, data shows.
On the other hand, Infosys’ bank deposits fell from Rs14,569 crore as on 30 September 2012, to Rs11,943 crore at the end of December, as per the latest quarterly financial accounts. This excludes funds in current accounts.
At the current level, Infosys’ money in bank deposits is at the lowest level since Rs11,732 crore as in June 2010.
Liquid mutual funds are estimated to have given a three-month return of 1.5-2.5% in December quarter.
Besides liquid MFs offering better yields than bank deposits, the fall in bank deposits could also be due to Infosys’ Rs2,000-crore Lodestone buy-out, experts said.
The company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
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