Tata Group loses whopping $75B in market value this year
What's the story
Tata Group, India's largest conglomerate, has witnessed a massive erosion of over $75 billion in its market value this year. The decline has been particularly steep in recent weeks due to a series of challenges including US visa curbs and a cyberattack on Jaguar Land Rover. The combined market capitalization of Tata Group's 16 companies hit its lowest point in nearly two years on Friday, according to Bloomberg data.
Market impact
TCS's stock fell over 8% last week
Tata Consultancy Services (TCS), the group's flagship company, has been at the forefront of this market decline. The tech giant's stock fell over 8% last week, marking its biggest fall since 2020. Other companies in the Indian IT sector, such as Infosys and Wipro, also witnessed similar declines in their stocks after US President Donald Trump announced plans to raise H-1B visa fees for new applicants to $100,000.
Future concerns
New visa rules could hurt contract bookings for TCS
Bloomberg Intelligence analysts Anurag Rana and Andrew Girard have warned that the new visa rules could hurt contract bookings for companies like TCS. They said, "These companies may not bid on contracts that require material onshore presence, which in turn could hurt new contract bookings over the next several quarters." This is especially true for pure-play firms such as TCS.
Cybersecurity breach
Cyberattack impacts Tata Motors
Tata Motors, another leading company in the group, saw its stock fell nearly 5% last week after its Jaguar Land Rover plants were hit by a cyberattack. However, the luxury carmaker managed to secure UK government's backing with a $2 billion loan to ease the strain on its suppliers.
Stock performance
Shares of majority of listed firms fall this year
The market downturn has affected a majority of Tata Group's listed firms. Shares of 12 out of the 16 companies have fallen this year as of Fridy. Tejas Networks has lost half its value, while Trent and Nelco have each shed nearly a third. The overall market value erosion is a major setback for India's largest conglomerate.