Indian Conglomerates: Bajaj Group Creates Most Wealth For Investors Amid Market Turmoil

Among the 11 large groups, five managed to return gains as of Aug. 22, while the remaining six have caused losses. Mukesh Ambani’s Reliance Industries Ltd. group and HDFC Group were among the top gainers, while Essel Group was among the top losers.

India’s benchmark Nifty 50 has eroded all gains as foreign investors turned sellers after Finance Minister Nirmala Sitharaman brought them under super-rich tax—the government rolled back the decision on Friday. Domestic slowdown and a trade war between the U.S. and China also weighed on the markets.

Here’s how companies from India’s largest conglomerates have fared so far this year.

The Rahul Bajaj Group’s auto and financial services companies returned gains, with Maharashtra Scooters Ltd.—a holding company of Bajaj Group—leading the table. It owns stake in all the four group companies.

Bajaj Finance Ltd. was the second-highest gainer on the back of growth in assets under management and stable asset portfolio. Bajaj Finance, despite its high valuation, was considered a safe haven among the crisis-hit non-bank lenders.

The market of companies in the Mukesh Ambani-led RIL group rose by over Rs 95,000 crore year-to-date. That was led by the flagship Reliance Industries, which rose on the back of strong financial performance of its consumer businesses—Reliance Jio Infocomm Ltd. and Reliance Retail Ltd.

However, the group’s media arms—Network18 Media Investments Ltd. and TV18 Broadcast Ltd.—declined. The group’s latest acquisitions—Hathway Cable Datacom Ltd. and Den Networks Ltd.—surged after Ambani announced rollout of a broadband services with bundled in content and cable offerings.

Barring one, all HDFC group companies generated returns. Gruh Finance Ltd.’s stock declined by over 25 percent so far, largely because of a slowdown in lending and its merger with Bandhan Bank Ltd.—the deal is yet to be completed.

HDFC Asset Management Company Ltd. gained the most as its assets rose and financials improved despite regulatory hurdles. The market regulator had last year asked asset managers to reduce their total expense ratio—or management fees and commissions.

HDFC Life gained traction after its inclusion in the MSCI Global Standard Index.

The Tata Group’s market rose by over Rs 70,000 crore, largely on the back of Tata Consultancy Services Ltd.—the group’s largest company. Of the major 23 listed Tata companies, only six returned gains.

TCS and Titan Company Ltd. jumped the most. TCS gained on double-digit revenue growth guidance, a weaker rupee against the U.S. dollar and steady shareholder payouts, while Titan grew led by a strong performance in jewellery segment and a steady store expansion. High debt and weak operational performance impacted share prices of Tata Steel Ltd. and Tata Motors Ltd.

Adani Gas Ltd.—recently spun off—is the top gainer among the Adani group companies as the company won licences to supply gas in 15 new areas in the last two rounds of city gas distribution auctions.

Adani Enterprises Ltd.’s share prices declined the most, followed by while Adani Ports and Special Economic Zone Ltd.

CESC Ltd. was the sole Sanjiv Goenka group firm to generate after the demerger of two of its units—CESC Ventures Ltd. and Spencer’s Retail Ltd. However, shares of both these units have declined since their listing in January.

Shares of Saregama India Ltd. fell due to a sharp drop in operating profit because of higher advertisement and sales costs and royalty expenses. The company also saw a decline in sales of its portable digital music player Carvaan.

Market of the Kumar Mangalam Birla-led group plunged by over Rs 40,000 crore led by its telecom arm—Vodafone Idea Ltd. The company’s shares declined by over two-thirds this year on falling core operating profit, subscriber losses and slower 4G subscriber addition.

That had a ripple effect on its other group companies—Hindalco Industries Ltd. and Grasim Industries Ltd.—which are promoters of the telecom company. Lower commodity prices, too, contributed to the decline in Hindalco’s shares. All group companies caused losses to investors.

Godrej Properties Ltd. was the only group stock that returns gains for investors this year, aided by delivery of the flagship Trees project in Vikhroli and launch of four new projects—two in the National Capital Region and one each in Pune and Bengaluru.

Astec Lifesciences Ltd. was the top loser, while flagship company Godrej Consumer Products Ltd. lost most in absolute terms due to slower recovery in household insecticide segment, a high base in soap business, challenges in overseas markets and a consumption slowdown.

The Harsh Goenka group’s market declined by 16 percent, led by its flagship tyremaker Ceat Ltd. and KEC International Ltd.

The worst automobile slowdown in nearly two decades dented sales and share prices of Ceat, leading to slower growth in its replacement segment. Shares of KEC International declined because of slower order translation, worsening working capital and higher interest costs.

Shares of Anand Mahindra-led group companies lost nearly Rs 57,000 crore in market this year—the highest among India’s large business groups—led by declines in Mahindra & Mahindra Ltd. and Mahindra & Mahindra Financial Services Ltd.

M&M’s eroded by over Rs 35,000 crore due to falling sales of tractors and cars. An increase in provisions for stressed loans and elevated cost of financing, owing to tight liquidity conditions, dragged down shares of M&M Financial. Tech Mahindra Ltd.’s declined by Rs 6,000 crore as its margin narrowed and telecom services providers delay 5G orders.

Share prices of all Zee Group firms declined on concerns of pledged shares and debt of promoter group entities. Zee Entertainment Enterprises Ltd.—the group’s flagship firm—lost nearly Rs 12,700 crore, or about 30 percent, in market despite a stake sale by promoters to a financial investor.

The promoter group is supposed use the proceeds of stake sale to repay debt and it will be selling another 9 percent stake in near future.