Tata Group companies have surged in market value over the past year, propelling the conglomerate's total worth beyond that of Pakistan's entire economy, according to a report by The Economic Times. The conglomerate, India's largest business entity, now commands a market capitalisation of $365 billion, equivalent to about Rs 30.3 lakh crore. This surpasses the International Monetary Fund's (IMF) estimations of Pakistan's GDP, which stands at around $341 billion, the ET report said.
Tata Consultancy Services (TCS), valued at approximately Rs 15 lakh crore or $170 billion, emerges as the standout within the conglomerate. Not only is it India's second-largest company, but its market worth is nearly half the size of Pakistan's struggling economy, which grapples with mounting debt burdens and economic crises.
Tata Group Companies' Performance
The surge in market value within Tata Group can be attributed to impressive returns from companies such as Tata Motors and Trent, alongside robust performances observed in Titan, TCS, and Tata Power over the past year. Notably, eight Tata companies, including the recently listed Tata Technologies, have doubled their wealth in this period. These companies include TRF, Trent, Benaras Hotels, Tata Investment Corporation, Tata Motors, Automobile Corporation of Goa, and Artson Engineering.
Analysis from ACE Equity reveals that among the 25 Tata companies listed on stock exchanges, only Tata Chemicals has experienced a decline in wealth over the past 12 months, indicating a notable resilience in the group's performance.
Taking into account the potential market value of unlisted Tata entities such as Tata Sons, Tata Capital, Tata Play, Tata Advanced Systems, and their airline ventures (Air India and Vistara), among others, the conglomerate's strength could significantly increase by an estimated $160-170 billion, or possibly more.
Pakistan's Economic Challenges
India, with a GDP of about $3.7 trillion, significantly surpasses Pakistan in economic magnitude by a factor of 11. The country is on track to become the world's third-largest economy by Fiscal Year 2028, poised to overtake both Japan and Germany. Currently, India holds the position of the fifth-largest economy globally.
In contrast, Pakistan, despite commendable growth rates in recent years, faces a challenging economic outlook in Fiscal Year 2023 due to the devastating impact of floods, resulting in significant losses amounting to billions of dollars. With external debt and liabilities totalling $125 billion, Pakistan is racing against time to secure funds, particularly to meet looming external debt payments commencing in July. Adding to the urgency, a $3 billion program from the International Monetary Fund (IMF) is on the verge of exhaustion next month.
Compounding these challenges, Pakistan's foreign exchange reserves hover around a precarious $8 billion, covering barely two months' worth of essential imports. Moreover, its debt-to-GDP ratio exceeds the worrisome threshold of 70 per cent, with credit ratings agencies expressing concerns that interest payments on its debt may consume roughly half of the government's revenues for the current year.