There has been a quiet change in the pecking order among the country’s top-three family-promoted business groups in terms of the market capitalisation of their listed companies.
The Pune-based Rahul Bajaj group, thanks to an amazing stock market ride by Bajaj Finance
and Bajaj Finserv, has grabbed third spot, pushing the Aditya Birla
group down to fourth position.
On August 14, the market cap of the Bajaj group’s listed companies reached Rs 3.9 trillion compared to the Rs 3.02 trillion of the Aditya Birla
group. The group is, of course, still behind the top two family group listed companies: the Tatas
(market cap of Rs 11.4 trillion) and the Mukesh Ambani
group (market cap Rs 7.8 trillion). The Bajaj group consists of the patriarch Rahul and brothers Shekhar (who runs Bajaj Electricals), Niraj (who looks after Mukand), and Madhur (who works closely with Rahul).
It’s been a dream run for the group. On August 14, 2013, it was only the eighth largest family business group in the country in terms of market cap, far behind the Tatas, Mukesh Ambani, Mahindra, Vedanta, Sunil Mittal, Aditya Birla, and Sun Pharma.
Yet its market cap has gone up over five times since 2013 compared to the market cap of the Aditya Birla
group and the Tatas
which doubled, and that of the Mukesh Ambani
group which rose 2.7 times. In the last one year the Bajaj group has been fighting a neck-and-neck battle over market capitalisation for the third slot with the Birlas. Sometimes one has edged ahead, sometimes the other. In March this year, Bajaj was ahead by Rs 24 billion. But based on the latest August 14 figure, this gap has now widened with Bajaj ahead by a substantial Rs 905 billion.
This huge rally has been possible primarily because of the staggering growth in Bajaj Finance
whose market cap is up by 60 per cent from March 31, 2018, to the closing price on August 14 , while Bajaj Finserv
saw a 36 per cent hike in its market cap in the same period. The two companies constitute for 70 per cent of the group’s market capitalisation.
Bajaj Auto has stayed more or less stable, going down marginally. The other listed companies in the group include Bajaj Holdings & Investments, the holding company; Bajaj Electricals, the home appliances company, steel maker Mukand Ltd, Hercules Hoists, and Mukand Engineers Ltd. The A V Birla group’s market cap is based on the stock prices of around 10 companies which include Ultra Tech Cement, Hindalco, financial services company Aditya Birla
Capital, Idea Cellular, Aditya Birla
Fashion, Aditya Birla
Money, Grasim, Aditya Birla
Chemical, Tanfac, and Sri Digvijay Cement.
The Bajaj group has also achieved another milestone by overtaking ITC in market cap this year, just as it overtook L&T and Hindustan Unilever last year. The market cap of ITC Ltd on August 14 was Rs 3.8 trillion.