Tata Group’s market value more than Pakistan’s economy: Report

Digital Desk: The Economic Times reported that the GDP of Pakistan has been eclipsed by the total market value of the Tata Group enterprises. 

 The article emphasized how the listed businesses of the Salt-to-Software conglomerate had produced outstanding returns on the stock market in just one year, and it further stated that the total worth of these businesses now exceeds the value of Pakistan's GDP, which is still beset by high levels of debt and inflation. 

The research states that the market capitalization of the Tata Group is over $365 billion, or more than Rs 30 lakh crore. This exceeds the GDP of Pakistan, which the IMF estimates to be approximately $341 billion.

With a market valuation of over Rs 15 lakh crore, or $170 billion, IT giant TCS is the most valuable of all the listed Tata Group companies. Based on IMF estimates, TCS alone represents half of Pakistan's heavily indebted and cash-strapped economy. 

Even if the entire market capitalization of the Tata Group has increased, Tata Motors and Trent's multi-bagger returns have made the largest impact. 

In just a year, Trent's share price has increased by a staggering 200 percent, while Tata Motors' has increased by 110 percent. Not to mention the positive performance of equities like those of Tata Technologies, TRF, Beneras Hotels, Tata Investment Corporation, Tata Motors, Automobile Corporation of Goa, and Artson Engineering.

It is noteworthy that, according to ACE Equity data cited in the ET story, of the at least 25 Tata Group companies that are listed on public markets, only Tata Chemicals has experienced a 5% annual decline. 

But these just represent the conglomerate's publicly traded companies. The Tata Group includes Unlisted Companies including Tata Sons, Unlisted Capital, Unlisted Play, Unlisted Advanced Systems, and Unlisted Air India. 

The Tata Group's overall market capitalization would increase significantly if these companies were taken into account. To put things in perspective, Tata Capital, which is supposedly going to go public the next year, is valued at about Rs 2.7 lakh crore on the unlisted market.

It is important to keep in mind that the group is professionally managed, mostly owned by philanthropic trusts, and does not have an individual promoter, even though the combined valuation has the capacity to easily make it the greatest conglomerate in terms of market capitalization. Noteworthy, Ratan Tata's ownership share in Tata Sons is less than 1%.

 

 Undoubtedly, Pakistan has been enduring the most severe economic crisis in its history following a string of failures in FY23. 

The nation is under pressure to find the money for impending external debt payments totaling $25 billion beginning in July. The nation is now struggling with $125 billion in external debt and liabilities.

Pakistan's financial difficulties will be exacerbated by the fact that its $3 billion IMF program is scheduled to end next month. 

Only two months will suffice for Pakistan to pay for necessary imports, given its foreign exchange reserves, which are now at $8 billion. 

 Additionally, the debt-to-GDP ratio has risen above 70%, which has caused credit rating agencies to express worries regarding the sustainability of interest payments, which may account for half of the government's revenue this year. '

India's GDP, on the other hand, is expected to grow to be the third largest in the world by FY28, with a value of $3.7 trillion, which is around 11 times larger than Pakistan's. With its current GDP, India is the world's fifth largest.