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Tata Group’s $365 billion valuation surpasses Pakistan’s entire economy

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In the past year, Tata Group companies have shown impressive performance, leading to a market value that now exceeds the entire economy of neighboring Pakistan, as reported by The Economic Times.

India’s largest conglomerate now holds a market capitalization of $365 billion or roughly ₹30.3 lakh crore, surpassing the International Monetary Fund’s (IMF) estimates for Pakistan’s GDP, which are around $341 billion.

Tata Consultancy Services (TCS), with a valuation of approximately ₹15 lakh crore or $170 billion, emerges as not just India’s second-largest company, but also nearly half the size of Pakistan’s beleaguered economy, currently facing an impending economic crisis exacerbated by a massive debt burden. This striking parallel highlights the considerable economic strength and market dominance wielded by the Tata Group in the region.

The performance of Tata Group companies

The Tata Group’s recent market value surge is mainly due to strong returns from Tata Motors and Trent, as well as impressive rallies in Titan, TCS, and Tata Power over the past year. Notably, eight Tata companies, including the newly-listed Tata Technologies, have doubled their wealth during this period. These companies comprise TRF, Trent, Benaras Hotels, Tata Investment Corporation, Tata Motors, Automobile Corporation of Goa, and Artson Engineering.

ACE Equity analysis shows that out of the 25 Tata companies listed on stock exchanges, only Tata Chemicals has seen a decrease in wealth over the past year, highlighting the group’s overall resilience in performance.

If we account for unlisted Tata entities like Tata Sons, Tata Capital, Tata Play, Tata Advanced Systems, and their airline ventures (Air India and Vistara), among others, the conglomerate’s strength could substantially rise by an estimated $160-170 billion, or even more.

The economy of Pakistan

India’s GDP, standing at approximately $3.7 trillion, dwarfs Pakistan’s economy by 11 times. With its current trajectory, India aims to leap to become the world’s third-largest economy by Fiscal Year 2028, surpassing both Japan and Germany. Currently, India ranks as the fifth-largest economy globally.

In contrast, Pakistan, which achieved growth rates of 6.1% in Fiscal Year 2022 and 5.8% in Fiscal Year 2021, 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 reaching $125 billion, Pakistan faces a pressing need to secure funds, especially to address the upcoming $25 billion in external debt payments starting in July. Complicating matters, a $3 billion program from the International Monetary Fund (IMF) is set to expire next month.

Adding to the urgency, Pakistan’s foreign exchange reserves stand at a precarious $8 billion, barely sufficient to cover two months’ worth of essential imports. Additionally, its debt-to-GDP ratio exceeds the concerning threshold of 70%, with credit ratings agencies expressing worries that interest payments on its debt could consume roughly half of the government’s revenues for the current year.

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