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Tata Motors, one of the early Sensex stocks, is on the verge of being thrown out of this oldest stock index of the country. The company has been a part of the Sensex since the first day of its inception in 1986.
Tata Motors’ market cap is not able to meet the minimum condition to remain in the Sensex after separation of commercial vehicle and passenger vehicle business.
In the current situation, the minimum market cap to remain in the Sensex is around Rs 2 lakh crore. Such a situation arose due to the division of the total market value of Tata Motors into two different companies. After the demerger in October, the market cap of Tata Motors Passenger Vehicle is Rs 1.37 lakh crore and the market cap of Tata Motors Limited (Commercial Vehicle) is Rs 1.19 lakh crore.
BSE will release the new list of Sensex on December 19.
In such a situation, the country’s largest airline InterGlobe Aviation (IndiGo) can replace Tata Motors in December rebalancing. Apart from this, Grasim Industries of Aditya Birla Group can make its place. BSE will announce changes in the list of companies included in Sensex in December. The new changes will come into effect from December 19 this year.
Tata, Reliance, HUL and ITC are always in Sensex
Among the 30 Sensex stocks, only 4 companies – Tata Motors, Reliance Industries, HUL and ITC have remained consistent. Tata Motors may be out of this list. In June this year, Nestlé, which had been a part of it for a long time, came out.
To be included in Sensex, the company should be among the top-75 companies of the country on the basis of full market cap. The weightage based on free-float market cap (value of shares available) should be at least 0.5%. On the other hand, the market cap of Indigo is more than Rs 2.27 lakh crore. The company is at the forefront among non-member companies of Sensex.
Losing membership of Sensex will reduce investor confidence.
- Negative effect: Periscope Analytics analyst Brian Freitas has estimated in a report published on SmartCarma that if Tata Motors is removed from the Sensex, then Rs 2,232 crore will be removed from the market due to the sale of the company’s shares.
- Positive Impact: If IndiGo joins Sensex, then Rs 3,157 crore can come into the market due to additional investment in its shares. Freitas said, ‘There is a slight possibility of Grasim Industries also being included in the Sensex. If this happens, Rs 2,526 crore will come into the market.
Signs of new tensions emerging within Tata Trusts
There is talk of increasing tension between Tata Group Chairman N Chandrasekaran and Tata Trusts Chairman R Venkataramanan. There is talk of a dispute in the board of Tata Sons regarding the voting rights of the nominated members of the trust.
Chandrasekaran has written a letter to Venkataramanan demanding to reduce this right, while Venkataramanan called it an attack on the autonomy of the trust. Also, the inclusion of Noel Tata’s son Neville in the Sir Ratan Tata Trust has also raised questions on internal coordination.
Novil was expected to join Sir Ratan Tata Trust, but Tata Trusts trustee Venu Srinivasan held a meeting on this and stopped the move.
Tata Motors Passenger Vehicles shares fell 7%
Shares of Tata Motors Passenger Vehicles (TMPV) saw a decline of 4.74% on Monday (November 17). It fell 7% to ₹363 during trading. Shares of Tata Motors Passenger Vehicles have fallen by more than 8% in the last 5 days. The company’s shares have fallen 6% in one month, 15% in six months and 20% in one year. The market cap of the company is Rs 1.44 lakh crore.
This fall in the company’s shares has come after the results of the quarter July-September 2025. The company has suffered a net loss of ₹6,368 crore in the second quarter (July-September). The main reason for this was the cyber attack on Jaguar Land Rover (JLR), which has affected the production.
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