The combined market value of Tata Group companies has surpassed Pakistan’s gross domestic product (GDP), reported The Economic Times.
The report highlighted how listed companies of the salt-to-software conglomerate have given stellar returns in one year on the stock market, adding that their combined value is now more than the entire economy of Pakistan, which continues to struggle with high levels of debt and inflation.
As per the report, Tata Group’s total market capitalisation stands at around $365 billion or over Rs 30 lakh crore. This is higher than Pakistan’s GDP, estimated by the IMF at around $341 billion.
Of all the listed Tata Group businesses, IT major TCS is its crown jewel with a market capitalisation of nearly Rs 15 lakh crore or $170 billion. Going by IMF estimates, TCS alone is half the size of Pakistan’s cash-strapped and debt-ridden economy.
While all Tata Group companies have contributed to the surge in the conglomerate’s total market value, the biggest contribution has come in the form of multibagger returns in Tata Motors and Trent.
Tata Motors shares have surged 110 per cent in just a year, while Trent has gained a whopping 200 per cent. This is in addition to the healthy performance of stocks such as Tata Technologies, TRF, Beneras Hotels, Tata Investment Corporation, Tata Motors, Automobile Corporation of Goa, and Artson Engineering.
It is worth noting that the Tata Group has at least 25 companies listing on the stock exchanges, and only one of them – Tata Chemicals – is down 5 per cent in a year, according to ACE Equity data quoted in the ET report.
But these are just the listed companies of the conglomerate. There are several unlisted companies under the Tata Group, including Tata Sons, Tata Capital, Tata Play, Tata Advanced Systems and Air India.
If these businesses are considered, then the total market capitalisation of Tata Group would see a substantial rise. To provide some context, Tata Capital, which reportedly plans to launch its IPO next year, commands a valuation of roughly Rs 2.7 lakh crore on the unlisted market.
While the combined valuation has the firepower to easily make it the largest conglomerate in terms of market capitalisation, it is worth noting that the group is professionally managed, is largely owned by philanthropic trusts and does not have an individual promoter. It may be noted that Ratan Tata owns less than 1 per cent stake in Tata Sons.
It is no secret that Pakistan has been going through its worst economic crisis in history after facing a series of setbacks in FY23.
The country, grappling with external debt and liabilities amounting to $125 billion, is under pressure to secure funds for upcoming external debt payments totaling $25 billion starting from July.
Additionally, Pakistan's $3 billion IMF program is set to expire next month, adding to its financial challenges.
With foreign exchange reserves hovering around $8 billion, Pakistan's ability to cover essential imports is limited to just two months.
Furthermore, its debt-to-GDP ratio has surpassed 70 per cent, raising concerns among credit rating agencies about the sustainability of interest payments, which could consume half of the government's revenues this year.
In sharp contrast, India’s economy, at $3.7 trillion, is approximately 11 times bigger than the size of Pakistan’s economy and is predicted to become the third-largest economy in the world by FY28. As of now, India is the fifth-largest economy in the world.
