Markets
Tata, Vedanta, other business groups join the market upswing
Summary
- India Inc’s titans join the market rally and shower impressive rewards on shareholders.
With the Sensex triumphantly breaching the 80,000-mark in nine straight sessions, the market's robust performance begs the question: which business conglomerates have reaped impressive returns for their shareholders? India's business landscape is ruled by a league of giants and these top conglomerates, spanning diverse sectors, wield immense influence and contribute significantly to the nation's economic might.
Leading business houses outshone the 30-scrip blue chip index by a wide margin, showed a Mint analysis of the 10 conglomerates in the year so far. These business titans that boast a combined market value of ₹112 trillion, recorded a significant near-20% increase against a 10% gain in the Sensex this year.
The Anil Agarwal-led Vedanta group has emerged as the top wealth creator in the year so far with 88% returns with the Mahindra group a distant second. Analysts are particularly interested in Vedanta's potential, given its diversified holdings and capacity expansion plans. However, debt reduction and the progress of its demerger remain key areas to watch.
Read more: Is Axis Bank's share price fall a knee-jerk reaction?
Leader of the pack, Tata group with a market capitalization of ₹32.2 trillion, has consistently held the top spot and recorded a 16% rise, year-to-date compared to a 35% jump in 2023. Another familiar name, the Mukesh Ambani led-Reliance group saw an 18% and 10% increase, respectively, during the periods.
However, the Adani group that faced a tumultuous period after the Hindenburg episode recovered impressively by delivering 18% returns this year against a 28% decline last year. "These leading Indian groups and companies, with their primary focus on the domestic market, act as a mirror to India's growth," says Kranthi Bathini, director of equity strategy at Mumbai-based WealthMills Securities.
“Although the Adani group's stocks initially declined due to the Hindenburg report, they have since recovered following positive results and a restoration of investor confidence. Specifically, Adani Enterprises and Adani Ports have bounced back, but some stocks in the group still remain subdued," Bathini said.
Other notable groups that registered a superior performance relative to the benchmark index includes Aditya Birla group, Mahindra group, Murugappa, JSW, and Godrej Industries group. The Rahul Bajaj group was the only exception to have seen just a 2% growth in their combined market capitalization.
Together, these giants have managed to hold a 25% share in the overall market capitalization of the BSE. Though this figure has come down from 28% to 25% in the last four years. “After a remarkable rally in the previous quarters, stocks in this group, including those of the Tata, Adani, and JSW groups, have entered a consolidation phase," added Bathini.
However, most of these fortunes are balanced on a single golden egg. Notably, Tata Consultancy Services is Tata’s crown, currently accounting for nearly half (48%) of its total market capitalization. Tata Motors and Titan Co. follow closely behind, contributing 12% and 10%, respectively.
Reliance Industries is the primary contributor of its group with a whopping 90.5% share and Jio Financial follows distantly with a 9.5% share. Adani Enterprises leads the charge within Adani group, contributing 20% to the group’s market capitalization. Adani Ports (19%) and the combined forces of Adani Green and Adani Power (16% each) follow closely.
Yet analysts believe these groups are well-positioned to benefit from India's projected economic surge. These conglomerates account for nearly two-fifths of India's economic output.
