Apple has so much cash it can buy TCS, Reliance and still be left with over $60 bn

Apple sits on a cash pile of roughly $285 billion which is more than enough to buy India’s two most valued companies – Mukesh Ambani-led Reliance Industries and Tata’s crown jewel TCS.

Apple Inc made history this week after its market cap crossed $1 trillion mark. A staggering stock valuation is not the only big number for the tech behemoth. The iPhone-maker sits on a cash pile of roughly $285 billion. This amount is more than enough to buy India’s two most valued companies – Mukesh Ambani-led Reliance Industries and Tata’s crown jewel TCS.

The market cap of RIL, India’s largest company in terms of revenue, as of today was at Rs 7.45 lakh crore ($109 bn) and valuation of India’s largest IT services firm TCS was Rs 7.57 lakh crore ($109 bn). The cash pile of Tim Cook-led company is over Rs 19.54 lakh crore or $285 billion.

This is more than enough to buy 30 odd listed companies of India’s largest business house, the Tata Group. The aggregate market capitalisation of India’s most valued private enterprise is over Rs 10 lakh crore. With such huge stash of cash reserves, Apple can also buy all four listed companies of HDFC Group. The collective valuation of Deepak Parekh-led financial services conglomerate had recently crossed Rs 10 lakh crore.

With a cash pile of roughly Rs 19.54 lakh crore, Apple can buy out RIL (7.45 lakh crore), TCS (Rs 7.57 lakh crore), Infosys (2.97 lakh crore) in one go and will still be left with over Rs 1.5 lakh crore.

Market Valuation

To put into perspective, the recent spike in stock prices has pushed Apple’s valuation to over $1 trillion. This number is close to about 38 per cent of India’s total GDP and more than thrice of Pakistan’s annual GDP.

Apple’s shares jumped after the company released its latest quarterly figures on Tuesday. CEO Tim Cook called it the company’s “best June quarter ever, and our fourth consecutive quarter of double-digit revenue growth”. Apple had reported a net profit of $48.5 billion in 2017.

The tech giant was first listed on the stock market for $22 a share on December 12, 1980. It had raised $110 million in one of the biggest initial public offerings to date. Those who bought Apple shares at the time of its listing would have seen their returns grow by 40,000 per cent until today.

Apple’s rise to the top has been meteoric. In 1985, Apple co-founder Steve Jobs was forced out of the company by CEO John Sculley. Apple Inc.’s m-cap was a paltry $3 billion when Jobs returned to the struggling company as interim chief in 1996, after it acquired his startup, NeXT.

Then came the success of iPod. In 2007, Apple launched its first iPhone in 2007 and by 2010, it was ready with its first iPad. The back-to-back launch of these tech gadgets set the cash registers ringing.

However, Apple is not the only company to cross $1 trillion valuation. The first company to hit a trillion dollar market cap was PetroChina and that too over a decade ago in 2007.

But it was all short-lived.

According to Bloomberg, PetroChina’s m-cap nosedived to less than $260 billion by the end of 2008. This was the biggest ever knock down of shareholders’ wealth in world history.

The valuation of Saudi Aramco, the state-owned oil behemoth of Saudi Arabia is pegged to be around $2 trillion. This makes Aramco twice the size of Apple. The company was planning to hit stock markets early next year to sell off 5 per cent shares worth $100 billion.

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