Reliance Industries closes in on TCS on market capitalisation

The difference in market capitalisation between the two bluechip companies is just 15%

Mukesh Ambani-led Reliance Industries (RIL) has significantly narrowed the gap with Tata group’s Tata Consultancy Services (TCS) in the race for the country’s most valuable firm. The difference in market capitalisation (m-cap) between the two bluechip companies is just 15 per cent following a 21 per cent jump in shares of RIL so far this year. Shares of TCS have gained only five per cent during the same period. On Monday, TCS’s m-cap stood at Rs 4.87 lakh crore, about Rs 63,516 crore, or 15 per cent more than that of RIL. Interestingly, about nine months ago, TCS’s m-cap was 68 per cent more than that of RIL. Since then, the technology major’s value has slipped 7.5 per cent from Rs 5.22 lakh crore, while that of RIL has climbed 32 per cent to Rs 4.23 lakh crore, the highest since May 8, 2008. TCS had surpassed RIL on February 13, 2013.

“After years of consolidation and underperformance, the stock of Reliance is regaining lost ground on account of several positive developments. First, its multi-year investment phase is complete. Second, we see inflection points in its refining segment. Last, telecom business is likely to generate positive cash flow from 2018-19,” said Amar Ambani, head of research, IIFL. He expects RIL to overtake TCS and regain top m-cap position.