Tata vs. Pakistan: Indian conglomerate market value now bigger than neighbour’s GDP
India's largest business conglomerate boasts a market capitalization of $365 billion or approximately ₹30.3 lakh crore, exceeding the International Monetary Fund's (IMF) estimations of Pakistan's GDP, which stands at approximately $341 billion.
Tata Group companies have delivered remarkable returns in the last one year, propelling the conglomerate's market value to a size surpassing that of the entire economy of neighboring Pakistan, according to a report by The Economic Times.
Currently, India's largest business conglomerate boasts a market capitalization of $365 billion or approximately ₹30.3 lakh crore, exceeding the International Monetary Fund's (IMF) estimations of Pakistan's GDP, which stands at approximately $341 billion.
Tata Consultancy Services (TCS), valued at around ₹15 lakh crore or $170 billion, stands out as not only India's second-largest company but also nearly half the size of Pakistan's struggling economy, which grapples with a looming economic crisis aggravated by an overwhelming debt burden. This stark comparison underscores the significant economic prowess and market dominance of the Tata Group within the region.
Tata Group companies performance
The recent surge in market value within the Tata Group can be largely attributed to remarkable returns witnessed in Tata Motors and Trent, alongside robust rallies observed in Titan, TCS, and Tata Power over the past year. Impressively, eight Tata companies, including the newly-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 one, Tata Chemicals, has experienced a decline in wealth over the past 12 months, marking a notable resilience in the group's performance.
Considering 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 economy
India, boasting a GDP of approximately $3.7 trillion, dwarfs Pakistan in economic magnitude by a factor of 11. The country's trajectory suggests a momentous leap to become the world's third-largest economy by Fiscal Year 2028, poised to surpass both Japan and Germany. Presently, India holds the position of the fifth-largest economy globally.
In contrast, Pakistan, having experienced a commendable growth rate of 6.1% in Fiscal Year 2022 and 5.8% in Fiscal Year 2021, faces a starkly different 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 towering at $125 billion, Pakistan finds itself in a race against time to secure funds, particularly to meet the looming $25 billion of external debt payments commencing in July. Adding to the urgency, a $3 billion program from the International Monetary Fund (IMF) is on the brink of exhaustion next month.
Compounding the challenges, Pakistan's foreign exchange reserves hover around a precarious $8 billion, scarcely covering two months' worth of essential imports. Moreover, its debt-to-GDP ratio surpasses the worrisome threshold of 70%, 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.
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