Virendra Pandit
New Delhi: Facing bankruptcy and dependency on foreign doles and repeated loans from the International Monetary Fund (IMF) for years, Pakistan’s Gross Domestic Product (GDP) is now less than India’s Tata Group’s combined market capitalization!
The Tata Group’s overall market capitalization is around USD 365 billion, or more than INR 30 trillion, more than Pakistan’s GDP, which the IMF estimates at nearly USD 341 billion, the media reported on Monday.
The listed companies of the salt-to-software Tata conglomerate have produced fantastic returns on the stock market in a year, and their combined value is now more than Pakistan’s entire economy, which is still struggling with high levels of debt and inflation.
Information Technology (IT) giant Tata Consultancy Services (TCS) is the crown jewel of the Tata Group’s listed businesses, with a market value of almost INR 15 trillion (USD 170 billion). According to IMF estimates, TCS alone is half the size of Pakistan’s cash-strapped, debt-ridden economy.
While all Tata Group firms have contributed to the conglomerate’s overall market value growth, Tata Motors and Trent have made the most significant contributions.
Tata Motors shares have risen 110 percent in a year, while Trent has gained a whopping 200 per cent. In addition, stocks like Tata Technologies, TRF, Benaras Hotels, Tata Investment Corporation, Tata Motors, Automobile Corporation of Goa, and Artson Engineering have all performed well.
The Tata Group has nearly 25 companies listed on stock exchanges, and just one of them, Tata Chemicals, has fallen five percent in a year, the reports said.
The Tata Group also has various unlisted companies, such as Tata Sons, Tata Capital, Tata Play, Tata Advanced Systems, and Air India.
Taken together, Tata Group’s total market capitalization would see a substantial rise. For example, Tata Capital, which might launch its Initial Public Offering (IPO) in 2025, has an unlisted market valuation of over Rs 2.7 trillion.
Pakistan, however, is burdened with a whopping USD 125 billion in external debt and liabilities and is under pressure to secure more funds for upcoming external debt payments of USD 25 billion beginning in July.
Besides, Pakistan’s USD 3 billion IMF program will end next month, exacerbating the country’s financial difficulties.
With foreign exchange reserves of a meager USD 8 billion, Pakistan’s ability to cover essential imports is limited to only two months.
Also, its debt-to-GDP ratio has surpassed 70 percent, raising concerns among credit rating agencies about the sustainability of interest payments, which are expected to swallow half of the government’s revenue this year.
In contrast, India’s GDP, worth USD 3.7 trillion, is about 11 times larger than Pakistan’s. India, currently the world’s fifth-largest economy, is expected to become the third-largest economy by the year 2028.