Top 5 Cash-Rich Midcap Stocks to Add to Your Watchlist

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Investing in midcap stocks can be an exciting and rewarding endeavour for those seeking higher growth potential than established large-cap stocks offer. Midcap stocks typically represent companies with a market capitalisation between ₹10–15 bn, striking a balance between stability and growth prospects. Now, when looking for investment opportunities in this segment, one crucial aspect to consider is a company's cash position.

Cash-rich midcap stocks are particularly attractive due to their strong financial position, which can serve as a catalyst for future expansion, acquisitions, and innovation. In this article, we explore the top five cash-rich midcap stocks, each with significant cash reserves that have the potential to deliver favourable returns to investors. Here are five companies that should be on your radar.

The first stock on our list is Mazagaon Dock Shipbuilders. The company’s cash in hand as a percentage of its market cap makes it the top contender on our list. Mazagon Dock Shipbuilder’s cash and bank balance of ₹114.8 bn stands at 42.9% of its current market capitalization of ₹267 bn.

This is largely because the company holds fixed deposits (FDs) on its balance sheet and as a result receives interest of ₹5-6 bn each year from its deposits with banks. The FDs are made primarily from the money received from customers in advance categorised as 'Contract Liability' until the money is paid/ advanced to the vendors for the shipbuilding parts. Going forward, its liquidity position is expected to remain strong in the absence of any repayments.