New Delhi: Tata Motors is once again at risk of being excluded from the benchmark Sensex index of the domestic stock market. The stock has been a prominent component of the Sensex since its inception, but after the company’s split into two separate listed entities, its combined market capitalisation has changed significantly — putting its position in the index under threat. A final decision is expected next month.
Why Tata Motors Is in Trouble
In October this year, Tata Motors completed its long-planned demerger, resulting in the formation of two separate listed companies:
Tata Motors Passenger Vehicles Ltd (TMPVL) – which houses the passenger vehicle and EV business.
Market cap: ₹1.37 lakh crore
Tata Motors Commercial Vehicles Ltd (TMCVL) – which operates the trucks, buses and commercial mobility segment.
Market cap: ₹1.19 lakh crore
While both companies individually remain large in their segments, they no longer meet the minimum size requirement for Sensex inclusion.
Sensex Requirement: Minimum ₹2 Lakh Crore M-Cap
For a stock to remain within the Sensex, its minimum total market capitalisation should be around ₹2 lakh crore.
Since Tata Motors’ value is now split between two separate entities, neither company individually meets this threshold.
This makes Tata Motors’ exit from the Sensex highly likely.
New Sensex List on December 19
The BSE will conduct its periodic review of the Sensex in December and publish the updated list on December 19.
Market experts believe that IndiGo (InterGlobe Aviation)—India’s largest airline with a market cap of ₹2.27 lakh crore—is the strongest contender to replace Tata Motors.
Another possible replacement is Grasim Industries from the Aditya Birla Group.
A Brief History of the Sensex
The Sensex was launched on January 1, 1986. Only three companies have remained in the index continuously since inception:
Reliance Industries
Hindustan Unilever
ITC
Others like Larsen & Toubro, Tata Steel, Tata Motors and Mahindra & Mahindra have been in the index intermittently, moving in and out over the years.
Tata Motors was removed from the Sensex earlier in December 2019 and re-entered in December 2022.
