At $365 billion, Tata Group grows bigger in size than entire Pakistan economy

With several Tata group companies giving outsized returns in the last year, the market value of the salt-to-software conglomerate has grown big enough to outmuscle the entire economy of neighboring Pakistan. At last count, the market capitalization of India's largest business house stood at USD 365 billion or Rs 30.3 lakh crore, while the IMF estimates Pakistan's GDP to be worth around USD 341 billion.

Valued at about Rs 15 lakh crore, or USD 170 billion, Tata Consultancy Services (TCS) is not only India's second-largest company but roughly half the size of Pakistan's economy, which is staring at a full-scale economic crisis with an unmanageable debt pile.

Triumph of the Tatas

Most of the recent gains in the Tata group's market value come from multi-bagger returns in Tata Motors and Trent, besides the healthy rally seen in Titan, TCS, and Tata Power in the last year. At least 8 Tata companies, including the recently-listed Tata Technologies, have doubled in the past year: TRF, Trent, Banaras Hotels, Tata Investments, Tata Motors, Goa Automobiles and Artson Engineering.

The Tatas have at least 25 companies listed on the stock exchanges, and only one of them (Tata Chemicals, which is down 5% in one year) has eroded its wealth in the past 12 months, according to data pulled from ACE Equity.

If the estimated market capitalization of unlisted Tata companies, such as Tata Sons, Tata Capital, Tata Play, Tata Advanced Systems, airlines (Air India and Vistara), among many others, is taken into account, then Tata's power could Easily grow to between USD 160 and USD 170 billion, if not more.

Tata Capital, which has to bring out its IPO next year as per Reserve Bank of India guidelines, has a market capitalization of Rs 2.7 lakh crore in the unlisted market. The historical group's holding company, Tata Sons, was valued at around Rs 11 lakh crore last year. RBI rules may also lead to Tata Sons IPO by September 2025.

Tata Play has already received Sebi's nod for the IPO, but the timeline is yet to be announced.

In a world where the general public and even investors are fascinated by the most senior figures in billionaire families, the professionally managed Tata group is an exception because it is largely owned by charitable trusts and has no individual promoter. Ratan Tata owns less than 1% of Tata Sons shares.

The late 'Big Bull' Rakesh Jhunjhunwala never shied away from publicly expressing his fascination for the Tatas.

In one of his TV interviews, the 'Big Bull' described Tatas as being blessed by God and that buying Tata shares wasn't planned that way.

"It's a coincidence. I buy shares in companies...but since Mr Chandra (Tata Group Chairman N Chandrasekaran) took over and I understood what he is trying to do, I got extremely bullish," Jhunjhunwala had said.

Even after his death, nearly half of the family portfolio, worth about Rs 50,000 crore, is concentrated in Tata stocks.

Plight of Pakistan

With a GDP of about USD 3.7 billion, India is 11 times bigger 

On the other hand, Pakistan's GDP, which recorded a growth of 6.1% in FY2022 and 5.8% in FY2021, is estimated to have contracted in FY2023 after floods caused massive damage totaling billions of dollars.

The country reportedly has foreign debts and liabilities going up to USD 125 billion, and the country is racing against time to find funds to meet the USD 25 billion of external debt payments starting in July. A USD 3 billion program from the International Monetary Fund (IMF) is also running out next month.

Pakistan's foreign exchange reserves stand at nearly USD 8 billion, which barely covers two months of essential imports. The debt-to-GDP ratio already exceeds 70%, and credit rating agencies fear that interest payments on its debt will absorb about half of government revenues this year.

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