Interest on old economy stocks pushes up Tata cos market cap by 15.58%

Interest on old economy stocks pushes up Tata cos market cap by 15.58%
ENS ECONOMIC BUREAU

MUMBAI, FEB 11: The Tatas are in the limelight on the stock markets these days, thanks to continued buying interest in Old Economy stocks. The 31-company Tata group gained 15.58% in market capitalisation to Rs 17,786.96 crore last week, retaining its position as the sixth biggest industrial house in the country. Hopes of sops in the forthcoming budget pushed up Tata group stocks, most of which are from the Old Economy. Tata group companies like Tata Steel, Tata Engineering, Tata Power, Indian Hotels, Tata Chemicals, Tata Elxsi, Tata Finance, Tata Tea and Tata Telecom recorded smart jumps in their market values, says Capital Market.

The tobacco group, ITC group, managed to hold its rank at No 5, but shed 9.37% in market cap to Rs 20,839.34 crore, following a 10.82% fall in market cap to Rs 19,879.44 crore. Cigarette stocks were under pressure following the government’s decision to ban smoking in public places and sponsorship of sports and cultural events by cigarette companies. The overall market remained steady last week, with the BSE 30-share Sensitive Index gaining 45.07 points or 1.03% to 4397.33. The market cap of the top 1,600 companies listed on BSE jumped by 26,512.03 crore or 3.50% on a sharp rise in Old Economy stocks.

The two-company ICICI group improved its ranking to No 9 from No 10 following a 20.07% rise in market cap to Rs 12,555.07 crore. Banking and finance stocks were in the limelight last week on hopes of a cut in the interest rates. Both ICICI (up 18.58% to Rs 8,795.81 crore) and ICICI Bank (up 23.70% to Rs 3,759.26 crore) gained smartly to push the ICICI group up by one place.

The Bajaj group also moved up by four places to No 13 following a 9.30% rise in market cap to Rs 3,626.11 crore. Bajaj Auto, the flagship of the 7-companies Bajaj group, gained 9.35% to Rs 3,306.06 crore last week on hopes of government sops for the automobile sector in the forthcoming budget.

The other major gainers in industrial groups during the past week were: Ambanis (up 3.39% to Rs 75,738.46 crore), Unilever (up 7.10% to Rs 47,356.0 crore), HDFC (up 5.40% to Rs 13,670.99 crore), Kumar Mangalam Birla (up 5.81% to Rs 12,628.51 crore), Gujarat Ambuja (up 6.61% to Rs 7,219.10 crore), Sterlite (up 3.88% to Rs 6,573.46 crore), Om Prakash Jindal (up 23.86% to Rs 2,457.67 crore), Mahindras (up 8.34% to Rs 1,905.55 crore), Jaiprakash (up 14.69% to Rs 1,348.43 crore) and B K Birla (up 14.48% to Rs 1,155.47 crore). “On the other hand, the Subhash Chandra group slipped further to no. 10 from no. 9 after losing 8.47% in market cap to Rs 10,207.45 crore.

Zee Telefilms, the flagship of the Subhash Chandra group, continued to lose ground last week on selling pressure from institutions, shedding 9.26% in market value to Rs 9,532.22 crore,” it said. Among the major loser in industrial houses during the week were: Shiv Nadar (down 4.03% to Rs 23,081.23 crore), Hero (down 1.64% to Rs 3,426.33 crore), Usha (down 10.83% to Rs 3,100.88 crore), Pentafour (down 2.49% to Rs 1,324.32 crore) and Morepen (down 6.52% to Rs 1,176.20 crore). Four listed cigarette companies collectively lost 10.13% in market cap to Rs 20,505.85 crore following the government’s decision to ban smoking in public places and sponsorship of sports and cultural events by cigarette companies.

Action was seen in the steel sector on hopes of rise in demand. The four-company steel-making industry gained 21.12% in market cap to Rs 11,001.52 crore in the last week. International steel prices (hot-rolled steel or HRC) have also gone up sharply in the last month.

This is also likely to help the domestic steel sector, feel analysts. While Tata Steel (up 14.14% to Rs 6,002.85 crore) touched a new 52-week high of Rs 164.45 on Friday on continued buying interest, PSU steel major SAIL gained 32.14% in the last week to Rs 9.30 on renewed buying interest. The four-company aluminium industry gained 6.32% in market cap during the wek to Rs 10,481.78 crore, but lost its rank by one place to no. 15. Power generation stocks also attracted huge buying interest following the government’s plan to scrap fixed rates of returns for power companies. Six power generation and supply companies gained 21.72% in market cap to Rs 6,125.77 crore.

The government is planning to scrap 16% cap on the rate of return for power projects. The new scenario will be market-driven and power companies will have to compete on efficiency of their plants and tariffs. The financial sector also witnessed some activity on hopes of an interest rate cut. Public sector banking, with 12 listed banks, gained 11.49% in market cap to Rs 20,653.13 crore during the past week. State Bank of India, the largest public sector bank in the country, gained 9.02% last week to Rs 13,454.86 crore on institutional buying interest. Private sector banking, with 18 banks, also improved its ranking by one place to No 9 following a 10.55% rise in market cap to Rs 14,914.91 crore.