Tatas may not be known for being on the stock-based rich list, but changing market dynamics have led to the salt-to-software conglomerate overtaking the combined market wealth of the two Ambani groups put together.
The share prices of both the Reliance groups, led by billionaire brothers Mukesh and Anil Ambani, have been tumbling in the recent past, and analysts put the blame on a string of controversies surrounding them for a few months now.
On the other hand, a host of Tata group companies have grown stronger in terms of stock market valuation, shrugging off an overall bearish sentiments in the broader market and even some controversies related to them.
In the process, the stock market wealth of the entire Tata group has grown to close to Rs 4,40,000 crore — the highest for any corporate house and bigger than the combined figure of the two Ambani groups, at about Rs 3,67,000 crore.
This marks a sharp reversal of the things seen about an year ago, when Tatas were smaller than Mukesh Ambani’s Reliance Industries (RIL). Tatas have about 30 listed companies, while RIL has only two.
According to the latest market value of individual groups, Tatas rank on the top, followed by RIL at the second slot with about Rs 2,85,000 crore.
The Reliance Anil Dhirubhai Ambani (R-ADA) group, which ranked third after RIL and Tatas a year ago, does not figure among the top 10 groups now.
In the past one year, R-ADA groups’s market wealth has plunged by over Rs 60,000 crore to close to Rs 82,000 crore now.
RIL’s valuation has also fallen by about Rs 73,000 crore, but that of Tatas has grown by more than Rs 1,00,000 crore in the same period.
The Tata companies that have added significant market wealth in the past one year are TCS, Tata Motors, Tata Steel, Titan, Tata Coffee, Tata Chemicals and Rallis.
On the other hand, all the companies of the two Ambani groups, barring the smallest of them, Reliance Broadcast Network, have lost market value since July last year.
Among Mukesh Ambani’s group companies, Reliance Industries has lost about Rs 72,000 crore, while the only other listed company, Reliance Industrial Infra Ltd, has also lost about Rs 650 crore.
Among Anil Ambani’s companies, the losses are about Rs 21,000 crore for Reliance Communications, about Rs 20,000 crore for Reliance Power, Rs 14,000 crore for Reliance Infra and over Rs 5,000 crore for Reliance Capital.
While the Reliance companies have been traditionally known as very aggressive on the stock market, Tatas have been mostly known as conservatives on this front.
Investors have historically preferred Reliance stocks for wealth creation, but the situation seems to be changing drastically, with both the Ambani groups giving below-market returns.
Amid dwindling investor interest in Reliance stocks, Tatas had not been the only beneficiaries, but a whole lot of professionally-run groups had also gained. These included the likes of the Birla, Mahindra, HDFC, Adani, Bharti, L&T, Jindal and Bajaj groups, experts said.
“Reliance stocks are more controversial at the moment, whereas others like HDFC or Mahindra groups are not,” Religare Securities Executive Vice-President (Retail Research) Rajesh Jain said.
“Moreover, a weak stock is more prone to getting affected by any negative news. That implies to RIL and ADA group stocks. RIL has underperformed the market in the past one year,” he added.
Way2Wealth Chief Operating Officer Ambareesh Baliga also said it was negative set of news playing spoilsport for the ADA group stocks.
“For RIL, it was the lower gas production at its KG-D6 basin that has discouraged the investors,” Baliga said.
“Brokerage houses have also downgraded the RIL stock, damaging the sentiments further,” he said, while adding that groups like HDFC and Mahindras had no such problem.
Talking about the Tata group, Baliga said: “Tatas also had a little exposure to the controveries related to the 2G scam.” Another market analyst said the general perception about Reliance groups had taken a hit in investors’ eyes after recent scams, while Tatas still enjoyed the reliability.
He, however, said the sectors in which the two Ambani groups operated had been under pressure and the share price decline may not have had much to do with the companies as such.
