2025, Vol. 6, Issue 2, Part J
Cash flow sensitivity of cash in the era of startups and unicorns in India
Author(s): Ritu Jain
Abstract: This study investigates the cash flow sensitivity of cash (CFSC) among Indian startups and unicorns, sectors characterized by high growth, significant venture capital involvement, and often delayed profitability. Using a panel dataset of 120 Indian startups and unicorns from 2017 to 2025, the analysis finds that the average cash holdings are 21.5% of total assets, while the mean operating cash flow is 12.5% of total assets. Regression results indicate that operating cash flow has a significant positive effect on cash holdings (coefficient = 0.427, p < 0.01), while leverage negatively influences cash holdings (coefficient = -0.128, p < 0.05). These findings highlight precautionary cash accumulation behavior of financially constrained firms and the role of internal cash flows in liquidity management. The results have implications for investors, policymakers, and entrepreneurs seeking sustainable growth and financial resilience in India’s dynamic startup ecosystem (Almeida, Campello, & Weisbach, 2004; Bruinshoofd, 2003; Kaplan & Strömberg, 2009).
Pages: 925-928 | Views: 231 | Downloads: 22
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How to cite this article:
Ritu Jain. Cash flow sensitivity of cash in the era of startups and unicorns in India. Asian J Manage Commerce 2025;6(2):925-928.
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