Even as the $70-billion Tata conglomerate looks for a replacement for group chairman Ratan Tata, the group?s market capitalisation is now the largest in the country, having overtaken that of the companies of both the Ambani brothers, Mukesh and Anil.
As fund managers, who continue to be underweight India, reshuffle their portfolios, the market capitalisation of the Tata group of companies is nudging the R4.25-lakh crore mark, whereas the total wealth of the listed companies, in the Ambani stables, amounts to R3.67 lakh crore. The wealth created by the Tata firms for shareholders, over the past year or so has increased by approximately R1,00,000 crore thanks to good performances by Tata Consultancy Services (TCS),Tata Motors and Tata Steel.
The most noticeable changes in share prices over the past few months have been seen in the Reliance Industries Limited (RIL) and TCS counters. While the RIL stock has lost close to 16% since April, 2011, the TCS stock has steadily gained value and now competes with ONGC for the third slot in the Indian market capitalisation sweepstakes. The RIL stock has been under pressure for a variety of reasons, most importantly the slow ramp-up of production of oil and gas at the company?s KG-D6 basin and lack of clarity on when production will be scaled up.The stock is currently trading at close to a two-year low.
The TCS stock has done well after it announced results, for the three months to March, 2011 that were better than the street?s expectations. Moreover, analysts have been more bullish on India?s biggest software exporter after rival Infosys announced a muted earnings guidance for 2011-12. On June 17, 2011, TCS?s market capitalisation stood at R2.17 lakh crore. Among the other Tata group stocks that have fared well over the past year are Tata Motors, which saw a tremendous turnaround in the performance of its overseas subsidiary Jaguar and Land Rover (JLR). However of late there have been some concerns on the business in the home market where operating margins fell 160 basis points sequentially in the March 2011 quarter. Tata Motors? market capitalisation on June 17, 2011 stood at R52,791 crore.
Meanwhile, the ADAG stocks, Reliance Communications and Reliance Infrastructure, will bow out of the?30-scrip benchmark Sensex from August 8, 2011. RComm posted relatively weak numbers for the March 2011 quarter even as it altered some accounting policies. On June 17, 2011 RCom?s market capitalisation was R19,630 crore. Over the past year, the ADAG’s market wealth has plunged by over R60,000 crore to close to R 82,000 crore now.