Market cap: Tata group takes pole position on TCS show

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SummaryExperts feel it is still too early to gauge impact of Mistry’s appointment on group’s m-cap

Some corporate houses managed to strengthen their position on the Street, while others have witnessed erosion in their market wealth in the year gone by.

Tata group has retained the title of the largest conglomerate in terms of market capitalisation with a combined market wealth of R6.81 lakh crore. The bulk of Tata’s market wealth has stemmed from Tata Consultancy Services (TCS) which has seen its share price surge by 72.5% in the current calendar year.

In the year, the group saw a new chairman Cyrus Mistry taking charge of affairs after Ratan Tata decided to retire from all executive duties.

However, experts feel it is still too early to gauge impact of Mistry’s appointment on the group’s m-cap. “He has to articulate his strategy for the group,” said Saurabh Mukherjea, CEO, Instituional Equities, Ambit Capital.

Meanwhile, Mukesh Ambani’s Reliance Group remains the second-largest group in terms of market capitalisation. The combined market worth of the group, which comprises of Reliance Industries (RIL) and Reliance Industrial Infrastructure, stood at R2.87 lakh crore as on December 30, 2013. However, RIL’s m-cap at R2.86 lakh crore shows that the petrochem and refinery giant is the primary driver of the group’s market wealth.

The recent gas price hike allowed by the Cabinet Committee on Economic Affairs (CCEA) for RIL’s KG-D6 basin has been viewed as ‘positive’ by brokerages. “While the developments are positive for the complete gas E&P sector, RIL is the biggest beneficiary, followed by ONGC & Oil India,” said Macquarie in a report. RIL scrip gained 4.71% post CCEA’s announcement.

In the current calendar year, RIL’s share price has gone up by 6.64%, with its market wealth expanding by 5.61% to R2.86 lakh crore.

According to experts, investors have historically preferred buying into companies with strong promoters. “Except for the market boom seen in 2006-07, identity of the promoters has been an important factor in investment decisions,” added Mukherjea.

At the same time, Anil Ambani Group has lost its place among the top-10 corporates with largest m-cap. The group’s total market wealth grew by only 1.39% to R68,549 crore in 2013.

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