Tata Group eyes $350 billion market cap by 2025

With its listed firms adding over USD 100 billion to market capitalisation in the last 15 years, the Tata Group is looking at an increase of nearly USD 250 billion by 2025, including through acquisitions.

The group will not shy away from global buyout activity and will continue to make significant investments in both existing as well as new businesses, including in the digital space to meet its vision 2025 targets.

“At the turn of the century, we had a relatively small market cap of just under USD 8 billion. We have added a 100 billion dollars plus to that in the last 15 years. I am quite confident that this will continue to grow,” Member-Group Executive Council and Brand Custodian, Tata Sons, Mukund Rajan told.

The Tata group has over 100 independent operating companies out of which 29 are publicly-listed. The listed entities had a combined market capitalisation of about USD 134 billion as on March 31, 2015. It has presence in over 100 countries across six continents.

The main listed Tata group companies, include Tata Steel, Tata Motors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels.

When asked about the target M-cap under the group’s 2025 vision, Mr. Rajan said: “Today we are well over USD 100 billion. By 2025, if we want to be amongst the 25 most valuable companies in the world, the number we would need to hit would be around USD 350 billion.”

“As per its 2025 vision, Tata group aims to be amongst the 25 most admired corporate and employer brands globally, with a market capitalisation comparable to the 25 most valuable companies in the world,” he said.

“If you look at the true valuation of Tata enterprises (today) as a group, it would in fact be substantially higher than what the additional USD 100 billion of market cap represents,” he said.

With the group taking the acquisition route successfully, such as Tetley, JLR and Corus to expand globally, it will not shy away from such activity again.

“I can’t predict what the future will bring to us but what I can certainly say is that thanks to Mr Tata we have the courage to make such acquisitions and when opportunities present themselves, we will appropriately deploy our learnings from the past in any future acquisitions,” Rajan said when asked if there could be as big an acquisition as Corus or JLR by the Tata group again.

Clearly stating the group’s appetite for inorganic route of growth, he said: “We have significant cash on the books of many of our companies. When we contemplate acquisitions, the timing will have to be picked carefully and we will need to pick the right moment in the economic cycle to close those acquisitions.”

Mr. Rajan, however, said apart from acquisitions the group would need to continue to make significant investments in both existing businesses and some of the new businesses, including in the digital space to meet its vision 2025 targets.

“There are new markets that we need to expand our footprint in. Obviously, markets like China will continue to grow in stature and size and we need to correspondingly ensure that our focus in those markets is also enhanced,” he said.