The HDFC group has overtaken the 151-year-old Tata group to emerge as India’s most valuable by way of market capitalization (m-cap).
According to a report in the Economic Times, the combined market value of the five listed companies of the HDFC group – HDFC, HDFC Bank, HDFC Life, HDFC Asset Management and Gruh Finance – stood at Rs 11.66 lakh crore as on May 20, 2019 while the combined m-cap of 29 Tata group companies stood at Rs 11.64 lakh crore, about Rs 2,000 crore less than that of the HDFC group.
Worth mentioning here is that there was a significant gap between the m-cap of HDFC group and Tata group before one-and-half year. The m-cap of the HDFC group was at Rs 8.4 lakh crore in January 2018 while the market value of the Tata group was at Rs 9.6 lakh crore at that time.
Increasing investor focus on financial services has helped the HDFC Group outrun the Tata Group. The rise of HDFC group m-cap has come despite a 60% rise in the market value of TCS, the Tata group’s crown jewel. TCS’ M-cap has increased from Rs 5.1 lakh crore in Jan 2018 to Rs 8 lakh crore as on May 20, 2019.
Except TCS and Titan Company, most other group companies of Tata group witnessed a decline in their market value in the last 18 months. The combined m-cap of the Tata group, excluding TCS, has shrunk from Rs 4.4 lakh crore in January 2018 to Rs 3.6 lakh crore at present. The HDFC Group, on the other hand, has been helped by strong stock performance of HDFC Bank and the listing of new group companies – HDFC Life Insurance and HDFC Asset Management Company (AMC).
Tata group which bought British luxury carmaker Jaguar Land Rover in 2008 for $2.3 billion, has lately become a drag on the salt-to-aviation conglomerate, recording losses for three straight quarters through December. Analysts say the biggest issue with the Tata group is its debt. The group has a combined debt of around $37 billion as of now.
(With Agency Inputs)