Tata Group Vs Adani Group: Earlier this year in July, Gautam Adani beat Bill Gates to become the fourth richest person in the world. The rise of Gautam Adani is a surprise to many. His wealth increased from $6 billion in 2017 to $115 billion in 2022, a 19x increase.
He now stands against RIL’s Mukesh Ambani, a second-generation billionaire. Media quips about their rivalry all the time. But not just Reliance, the Adani group is now head to head with Tata as well.
In this article, we will compare the two giants: Tata Group Vs Adani Group. A multi-generation empire against first-generation college dropouts. We will look at their history, get an overview of the companies and understand the future plans of both business houses. It is going to get very interesting. So let us begin.
Tata Group Vs Adani Group – History & Ownership Structure
We shall get to the comparison of the companies eventually. But first, let’s read about the history of the two business empires.
Born in 1962, Gautam Adani is the founder of Adani Enterprises. Adani Enterprises Ltd (AEL) is the holding company of the Adani Group. He founded AEL as a trading company in 1988, with interests in many industries including mining, power, transmission, cement, ports, renewable energy, and airports.
Compared to Tata, Adani Enterprises doesn’t derive any earnings from the IT sector. However, it has entered the data centre business with EdgeConneX, a leading data centre solutions provider.
Currently, Gautam Adani himself is the chairman of the group. Other members of his family hold different senior positions across companies.
AEL got listed in 1994. Since then, its share price has grown at a 37% CAGR annually. However, it has been a topsy-turvy ride for the investors of the Adani Group companies.
Recently, the group got caught in the allegations of fraud, price manipulation and more by New York-based Hindenburg Research. Some group stocks fell severely, even hitting their lower circuits. It will be some time before the storm around the fraud allegations settles.
Founded in 1868, Tata was established by Jamsetji Tata as a trading entity. Today, the group’s product offering extends from salt to software. Tata Group is also India’s largest conglomerate. It is spread globally with operations in more than 100 countries.
The conglomerate had an estimated annual turnover of $128 billion in 2022. Its sheer size can be gauged by the fact that it accounted for 4% of India’s GDP in 2018.
The group has interests in almost all industries with leadership in software, steel, auto, chemicals and other sectors.
Tata Sons is the holding company of the Tata Group. Over 66% of the holding company is controlled by philanthropic trusts. The shareholding of the Tata family is in a small proportion. The Mistry family holds an 18.4% stake in the company.
Presently Natarajan Chandrasekaran is the executive chairman of Tata Sons. He also sits on the board of other Tata Companies and has previously held various positions at other Tata companies.
Tata Group Vs Adani Group – Listed Companies
Adani Group Companies
Including the recent acquisitions, the Adani empire has 10 listed companies and various other unlisted entities. The table below displays the names of the public companies of the group.
|Company Name||Industry||CMP (Rs)||Market Cap (Rs Cr)|
|Adani Green Energy||Renewable Energy||1,224||194,000|
|Adani Total Gas||Utility||2,113||232,000|
|Adani Enterprises||Holding Company||2,974||340,000|
|Adani Ports and Special Economic Zones||Martime||613||132,000|
|New Delhi Television||Media||247||1,600|
We know AEL more or less now. Therefore, we will devote some space to understanding the other three largest companies of the Adani empire.
Adani Green Energy Ltd. (AGEL)
AGEL is one of the largest renewable energy companies in India. It has a present project portfolio of 20,434 MW. It develops, builds, owns, operates, and maintains utility-scale grid-connected solar and wind farm projects.
The electricity produced is sold to central, state, and other government-backed power companies.
It already has 54 operation projects and 12 new projects are under construction.
Adani Transmission Ltd. (ATL)
ATL is the power transmission and distribution arm of the Adani Group. It owns and operates various high-voltage AC transmission lines and substations through its 18,500 ckt km of the transmission network. In addition to this, the company also distributes power in Mumbai, the commercial capital of India.
The company’s burgeoning debt levels have raised the eyebrows of market experts. In one instance, it sold a 25.1% stake in AEML to Qatar Investment Authority. It used ⅓ of the funds to pay back debt and kept the remaining as a capital buffer.
Adani Total Gas
Adani Total Gas (abbreviated as AGL) is involved in the business of the distribution of piped natural gas. It is India’s largest city distribution company. AGL transmits gas to industrial, commercial, and residential sectors. Furthermore, it also provides CNG in the transportation sector.
It has a strategic partnership with Indian Oil Corporation for city gas distribution. It is spread across 19 geographical areas in multiple states of India.
Tata Group Companies
There are 20 publicly listed Tata companies as of the present date with proposed IPOs of two more companies. Here is a list of listed Tata companies.
|Company Name||Industry||CMP (Rs.)||Market Cap (Rs. Cr)|
|Tata Consultancy Services||Software||3,359||1,230,000|
|Tata Consumer Products||FMCG||729||68,000|
|The Tata Power Company||Power||213||68,000|
|The Indian Hotels Company||Hospitality||301||43,000|
|Tata Teleservices (Maharashtra)||Telecommunications||79.4||15,500|
|Tata Investment Corporation||Holding Company||2,134||11,000|
|Tata Coffee||Tea & Coffee||213||4,000|
|Tata Steel Long Products||Steel||710||3,200|
Now, let us take a quick look at the three largest companies of the conglomerate.
Tata Consultancy Services
TCS is the crown jewel of the Tata empire. It is a profit-making machine and posted a net profit of Rs. 38,449 crores in FY22. Though Tata Steel posted a higher profit of Rs. 41,749 led by a rally in steel prices, historically TCS has been a top-runner cash cow for the group.
It is an IT services company and earns its revenues from America and Europe chiefly. It provides software services in 5 major industries: banking, finance services & insurance, retail & consumer business, communication, media & technology, and manufacturing.
A key beneficiary of the commodity cycle, this steelmaker posted record profits in FY22. It produces a gamut of steel products including high-value-added products. These value-added products have higher margins and help with the profitability of the company.
Over the years, the steel giant has grown organically and inorganically. Previously, it acquired Bhushan Steel, Usha Martin, Rashtriya Ispat Nigam and Corus Group.
It recently announced a stock split of 1:10, resulting in the division of 1 equity share of face value Rs. 10 into 10 equity shares of Rs. 1 each.
Also owned by ace investor Rakesh Jhunjhunwala, Titan is the country’s largest jewellery retailer. It owns brands such as Tanishq, Zoya, Mia, Caratlane, Fastrack, and Sonata.
The company earns 83% of its revenues from the jewellery business. It posted profits of Rs. 2,173 crores in FY22 on revenues of Rs. 28,799 crores.
It is one of the most preferred companies in India. It has given stellar returns to its investors over the last 20 years.
Tata Group Vs Adani Group – Future Plans
Tata Group Future Plans
Tata has been ramping up its digital infrastructure in an effort to become a full-fledged digital player. In addition to this, the group is very bullish on the telecommunications and electronic vehicles category.
- It launched the Tata Neu app in April 2022. Tata Neu is an umbrella application that allows people to make purchases from any of the products and services offered by the Tata Group companies.
- It acquired BigBasket and 1mg the previous year to drive its e-commerce foray.
- Recently, the group purchased loss-making Air India & Air India Express to bring the legacy of Maharaja back. Air India became a government company when GoI purchased a majority stake in 1953.
- Furthermore, Tata acquired Tejas Networks and entered the telecommunications gear market in 2021.
- The automobile arm, of Tata Motors is a leader in the EV segment in India. It has laid down its plans to make the Jaguar brand entirely electric by 2025. Apart from this, the company has various other EV models in its pipeline.
- Tata Steel has pegged Capex of FY23 at Rs. 12,000 crores, signalling the confidence of the steelmaker in the industry going forward.
- In the renewable energy sector, Tata Power is not behind either. Tata Power is India’s largest integrated power company. Over the next five years, it has projected a capital expenditure of a whopping Rs. 75,000 crores. The power subsidiary has plans to take the share of green energy to 60% from the current level of 30%.
Adani Group Future Plans
Gautam Adani and his companies have been in the news frequently in the past few years. Let us have a look at major developments and the future trajectory of the group.
- Adani acquired cement giants ACC and Ambuja Cements from Swiss building materials manufacturer Holcim for a whopping Rs. 80,000 crores. This signals the group’s bullishness in the construction sector.
- Recently at the annual general meeting, Gautam Adani announced the group has planned $ 70 billion in the clean energy sector: green hydrogen, solar, wind and hybrid.
- In the e-commerce space and technology space, Adani has partnered with Flipkart as a strategic partner. For instance, both companies have come together to build logistics and data centre capabilities. Furthermore, the Adani group invested in Cleartrip, a trip aggregation platform that is part of the Flipkart group.
- As per the reports, the group is in talks to raise Rs. 14,000 crores from SBI to build a mega PVC manufacturing plant worth Rs 19,000 worth of investment.
- A short while ago, Adani Data Networks, a subsidiary company entered the 5G enterprise solution space by bidding at 5G spectrum auctions by the Department of Telecommunications.
Having come this far, we are in a position to perform a quick comparison of both business groups.
History: Tatas have a long legacy of more than a century behind them with business interests in almost all sectors. Whereas, the Adani Group has a short history as Gautam Adani is a first-generation billionaire.
Key Sectors: Tata Sons derives its major earnings from the software, metals, chemicals, retail and consumer products industries. Adani’s key presence is in the power, utility, energy, construction, and logistics sectors.
Debt: Most of the Tata group companies have low debt levels. And not just this, Tatas have an impeccable track record of turning around and paying back the debt of struggling companies. However, in May this year, the gross debt of Adani Group companies reached a record Rs. 2.2 trillion. But that is another fact that Adani Group primarily operates in capital-intensive industries.
The Tata Group has come a long way. Their contributions to nation-building, employment generation and wealth generation are uncountable. In contrast, Adani companies are still at a growth stage with their high PE ratios and heavy Capex plans.
Do you think there is more than meets the eye for Tata? Or will Adani cross borders to enter the industries where Tatas dominate? It is said that time has all the answers in the stock market. So, let us wait to see how these companies perform. Till then, save more and keep investing.
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Vikalp Mishra is a commerce graduate from the University of Delhi. He likes to write on finance, money and business. He is a voracious reader with a genuine interest in investing. Drop him a mail at email@example.com.
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