More majors' scrips floundered in 2013

Tata group, however, added more wealth than the next top 12 combined; PSUs, in general, had a bad year

The year 2013 wasn’t kind to many big business groups. As many as eight major ones lost a combined market value of Rs 3.4 lakh crore, as compared to only two which lost a lowly Rs 600 crore in market value in 2012. The bulk of the loss is from government-owned companies, which together lost close to Rs 3 lakh crore. Shriram Group, Larsen & Toubro, Hinduja, HDFC, Bajaj, Holcim and OP Jindal all lost a chunk of the market capitalisation they gained in 2012. These groups saw a combined increase of a little over Rs 2 lakh crore in their market value in 2012 but lost Rs 26,885 crore in the 2013 calendar year.

Business groups with old economy-led businesses in power, ports and other sectors have not found the going good, as the markets shunned capital intensives in favour of cash-generating export businesses. The Mukesh Ambani and A V Birla groups added Rs 18,124 crore and Rs 14,848 crore, as compared to over Rs 40,000 crore each of the groups added in 2012. The Adani and Anil Ambani groups, which added merely Rs 623 crore and Rs 1,244 crore in 2013, respectively. By contrast, groups with a significant chunk of revenue from export-led and information technology segments have seen market values soar. The Mahindra group, with its new crown, Tech Mahindra, added Rs 37,253 crore in 2013. The Shiv Nadar group added Rs 44,871 crore.

The biggest gainer was the Tata group. It added Rs 190,822 crore, more than the Rs 180,000 crore cumulatively added by India’s other top 12 conglomerates in 2013. The Tatas added almost twice the market value they did in 2012, making them the second largest business group (next only to the central government), with total market capitalisation of Rs 685,841 crore. This is more than twice the size of the Mukesh Ambani group, whose market worth is Rs 289,698 crore.

The change in fortunes coincided with a reversal in the market, which has preferred non-cyclicals, defensives and export-oriented groups. The bulk of the big houses, which have a large part of their business in infrastructure, power and oil & gas, have not had a great year on the bourses.

Says Motilal Oswal, chairman, Motilal Oswal Securities: “A shift has happened in the past year. Companies with good managements and in good sectors have made tremendous gains. For some others, the overall economic environment and higher interest rates have affected their market worth.”

The Munjal group, which did not have a very good 2012, as its flagship Hero MotoCorp saw a decline on a split with Honda, saw its fortunes change in 2013. The group saw an increase of Rs 3,552 crore last year. The Vedanta group, led by Anil Agarwal, climbed up to fourth spot, pipping the Aditya Birla Group, led by Kumar Mangalam Birla. The former added Rs 42,046 crore in market capitalisation in 2013, as compared to Aditya Birla’s addition of Rs 14,848 crore. Government-owned entities, as a group, lost a whopping Rs 3 lakh crore of market value in 2013. Public sector banks, capital goods and power companies were among the sectors which saw an erosion in market value. This group had added Rs 2.2 lakh crore of market value in 2012. This year, almost all public sector units (PSUs), with the exception Oil and Natural Gas Corporation, have been on a losing streak

Says Oswal: “PSUs have been unable to show any great performance and they have been losing value the whole of last year. Their core operations also have taken a beating. Sectors like PSU banks and a lot of mining companies have not found favour in the market.”

The race for the biggest group in market capitalisation is between the Tatas and the government. The former added Rs 190,822 crore to their market kitty in 2013, taking the group's value to Rs 6.85 lakh crore. This narrows considerably the earlier gap with the government, which has a market worth of Rs 13.14 lakh crore at the end of 2013.