Reliance m-cap dips 3.12%, Tatas' up 15.51% this fiscal
The market capitalisation of the Reliance group has declined 3.12 per cent since the beginning of the new fiscal. However, despite this fall, the market cap of the Reliance group is still larger than that of the Tata group and the A V Birla group.
The market cap of the Reliance group was pegged at Rs 447.57 billion on May 8, as compared to Tata group (at Rs 187.36 billion) and the A V Birla Group (at Rs 116.76 billion).
According to analysts, the decline in the Reliance group's market cap could be attributed to the merger of two group companies -- Reliance Industries and Reliance Petro -- and the uncertainty among investors over the allocation of funds to the Reliance Infocom project.
The Tata group, on the other hand, has been able to enhance its shareholders wealth due to its restructuring efforts. Besides, group company, Tata Engineering has also shown signs of revival.
Interestingly, the Tata group enhanced its market cap by almost 15.7 per cent since the beginning of the fiscal, while the A V Birla group has seen its market cap rising 4.5 per cent during that time.
Analysts attributed the rise in the Tata group's market cap to rumors of a stake hike by the parent, and expectations of upbeat results, which sent stocks of Tata Telecom, Trent, Tata Steel, Tata Elxsi, Tata Infotech and Tata Coffee higher.
"The Tata group has also been in the limelight because of its restructuring efforts and its new-found aggression, whereby it went ahead and bagged two PSUs -- CMC and VSNL. These two acquisitions have further strengthened the groups position in IT services and telecom sector," said Aman Chowhan, an analyst at Taib Securities.
"Stocks of Tata Elxsi, Tata Infomedia, Tata Infotech, CMC, Tata Telecom have seen an upward rally. The market is expecting the CMC listing sometime this year," he added.
The small IT companies in the group are also benefiting through Tata Consultancy Services' marketing network.
Besides, Tata Engineering is showing signs of revival. Stocks of Tata Engineering have risen 9.9 per cent, from Rs 126.10 on April 1 to Rs 138.6 on May 8.
"Reliance group stocks, on the other hand, have lost significantly due to the recent spike in crude oil prices, the communal riots in Gujarat, and lukewarm investor response to the merger between Reliance and Reliance Petro," a senior analyst from a leading brokerage said.
Stocks of Reliance Industries and Reliance Petroleum have slumped 3.7 per cent and 2.26 per cent, respectively, during the last one month.
Stocks of Reliance Industries were pegged at Rs 289.85 on May 8, as against Rs 300.95 on April 1, 2002.
Meanwhile, the BSE Sensex witnessed an 1.85 per cent fall, from 3500.18 on April 1 to 3423.75 on May 8. The Nifty index also fell 1.8 per cent, from 1138.95 as on April 1 to 1117.60 on May 8.
As far as the A V Birla group is concerned, analysts attributed the 4.5 per cent rise in the group's market cap to better performance by cement companies. They said, the cartel has sustained on the pricing front, and volumes have also picked up.
The price cycle for metals has turned positive, while steel and yarn prices have also risen. All this put together has benefited the A V Birla group, they said.