Investments Exceed Market Cap in These 15 Companies

2 June 2023
2 mins read
Do you check investments in the asset side of the company’s Balance Sheet before making your investment decision?
Investments Exceed Market Cap in These 15 Companies

Market capitalisation refers to the market value of a company’s equity. It is a quick and easy method for estimating a company’s value by extrapolating what the market thinks it is worth for publicly traded companies. Market capitalisation is one measurement of a computing company’s size and through which one can easily identify whether it is a large, mid, or small company. To calculate market cap, take the total number of a company’s shares outstanding and multiply that figure by the company’s current stock price. Market cap is an important item while computing the Enterprise value of the company.

There are different items available in the balance sheet that help to understand and interpret the business’s financial position. One of the crucial items on the assets side is investments, considered one of the most important line items in the balance sheet.

The investment done by the company can be different in nature. These may include investments in stocks, bonds, property, mutual funds, exchange-traded funds, commodities, hedge funds, etc. It’s important to note that investments are made by a business to generate a return. However, some investments can be riskier in nature and generate higher returns and vice versa. All the investments are recorded as an asset of the business irrespective of their nature. If the companies invest in various investment options sparing some money from its profit is a good sign for the company’s growth.

These are the top 15 companies having investments in their balance sheet more than their market capitalisation:

S.No. Name CMP M Cap ( Crores ) Investments ( Crores )
1 Oil India ltd 254.3 27571.0 27967.9
2 Piramal Enterprises ltd 782.5 18674.2 22331.8
3 Tata Motors-DVR 279.5 14210.1 24620.3
4 Maharashtra Scooters ltd 5354.8 6120.5 20363.9
5 Jindal Poly Film ltd 670.0 2933.7 3642.2
6 Vindhya Telelink ltd 1999.8 2369.8 3060.2
7 Alembic ltd 67.4 1730.7 1753.6
8 Kiri Industries ltd 290.1 1503.5 1992.2
9 Ramco Industries ltd 161.5 1401.5 3057.7
10 Universal Cables ltd 371.0 1287.0 1359.0
11 Uniphos Enterprises ltd 153.1 1064.5 2856.4
12 India Motor Part & Accessories ltd 750.1 936.1 1287.8
13 Dhunseri Ventures ltd 238.1 833.8 2512.5
14 Rajapalayam Mills ltd 690.6 636.7 2019.2
15 Zuari Agro Chem. 139.9 588.2 1160.3

Companies having Investments more than the market cap do not necessarily entail that these companies are undervalued. Investors should use other metrics to value a company before taking a buy or sell decision. While having more Investments is a positive sign for any company because assets have the ability to generate income, it is also important to look at the company’s liabilities.