Glossary
Net debt
M2.02 · M3.06Also called net borrowings, net debt position.
Total borrowings minus cash and liquid investments. It is the figure used in an enterprise value bridge and the honest answer to how much the company really owes.
A firm with ₹1,420 crore of debt and ₹400 crore of cash carries ₹1,020 crore of net debt.
The netting assumes the cash is available and unrestricted, which is worth verifying rather than assuming. Cash trapped in a subsidiary the parent part-owns, or pledged as margin, or held offshore where repatriation carries a tax cost, does not reduce the obligation in the way a straight subtraction implies.
Where net debt is negative, the company has more cash than borrowings, and enterprise value falls below market capitalisation.
Check the restricted-cash disclosure before netting anything.