Tatas overtake both Ambani groups together on market wealth

The share prices have been tumbling in recent past for both the Reliance groups, led by the billionaire brothers Mukesh and Anil Ambani, and the analysts put the blame on a string of controversies surrounding them for many months now.

On the other hand, a host of Tata group firms have grown stronger, in terms of stock market valuation, while 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 -- highest for any corporate house and bigger than the combined figure of the two Ambani groups together 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 the Mukesh Ambani group alone. Tatas have about 30 listed companies, while the Mukesh Ambani group has only two.

As per the latest market value of individual groups, Tatas rank on the top, followed by Mukesh-led Reliance group at second position with about Rs 2,85,000 crore.

The Reliance Anil Dhirubhai Ambani Group (R-ADAG), which ranked third after the Mukesh-led RIL group and Tatas a year ago, does not figure even among the top 10 groups now.

In the past one year, R-ADAG's market wealth has plunged by over Rs 60,000 crore to close to Rs 82,000 crore now.

The Mukesh-led group'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 include 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.

In the MDA group, Reliance Industries has lost about Rs 72,000 crore, while the only other listed firm Reliance Industrial Infra Ltd has also lost about Rs 650 crore.

Among ADAG firms, the losses are about Rs 21,000 crore for RCOM, about Rs 20,000 crore for R-Power, Rs 14,000 crore for R-Infra and over Rs 5,000 crore for Reliance Capital.

While the Reliance companies have been traditionally known as very aggressive when it comes to the stock market, Tatas have been mostly known as conservatives on this front.

Investors have historically preferred Reliance stocks for wealth creation, but situation is changing drastically as both Ambani groups are giving below-market returns.

Amid the dwindling investor interest in Reliance stocks, Tatas have not been the only beneficiaries but a whole lot of groups known to be professionally-run have also gained.

These include 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 VP (Retail Research) Rajesh Jain said.

"Moreover, a weak stock is more prone to get affected by any negative news. That implies to RIL and ADAG stocks. RIL has underperformed the market in the past one year," he added.

Way2Wealth's Chief Operating Officer Ambareesh Baliga also said that it was negative set of news playing spoilsport for the ADAG stocks.

"For RIL, it was the lower gas production at the KG-D6 basin which has discouraged the investors," Baliga said.

"Brokerage houses have also downgraded the RIL stock which further damaged sentiments," he said, while adding that groups like HDFC and Mahindras had no such problems.

Talking about the Tata group, Baliga said, "Tatas had a little exposure to the controveries related to the 2G scam".

Another market analyst said that the general perception about Reliance groups has taken a hit in investors' eyes after recent scams, while Tatas still enjoy the reliability.

He, however, said the sectors in which the two Ambani groups operates have been under pressure and the share price decline may not have much to do with the companies as such.

On the other hand, Ashika Stock Brokers Research Head Paras Bothra said that stocks of groups like Tatas and Mahindras were at the forefront of the stock market rally that followed after the crash in 2008.

"Mukesh Ambani group could not perform after a certain point and the ADAG largely underperformed," he said.

Bothra said that Tatas' name have not figured among those involved in the recent scams and the general perception is that the they are much better in terms of professionalism.

"ADAG is scam-hit and what happens on CAG report is going to be a big trigger for RIL," Bothra said, while adding that the Tatas' earnings performance has also been very robust.

"Ambani groups are struggling with their issues and Tatas are much more insulated in the current environment," he noted.

Among top-10 groups as per current valuations, Tata and RIL groups are followed by HDFC (Rs 205,000 crore), Infosys (Rs 158,700 crore), ITC (Rs 1,49,000 crore), Bharti (Rs 145,000 crore), Vedanta (Rs 134,000 crore), Adani (Rs 131,000 crore), ICICI (Rs 119,000 crore) and Aditya Birla Group (Rs 114,000 crore).

Among these, market value of only one listed firm has been taken into account in case of Infosys, ITC, Bharti and ICICI Bank, while others have more than one listed entities.