Marking a significant milestone for the Indian automobile industry, Mahindra & Mahindra (M&M) has overtaken American auto giant Ford Motor Company to become the world's 12th most valued carmaker, hitting a market capitalisation (m-cap) of ₹4.24 lakh crore.

Riding on a high following Prime Minister Narendra Modi’s Independence Day announcement of a GST regime revamp, shares of M&M surged by 5% to hit an intraday high of ₹3,430 apiece on the BSE on Monday. The surge pushed the company's m-cap by ₹18,740 crore, surpassing Ford’s ₹3.98 lakh crore valuation as of closing on Friday.

Maruti Suzuki, the country’s most valued automobile company, retained the 10th spot globally with an m-cap of ₹4.4 lakh crore, ahead of Porsche (₹4.2 lakh crore), and inching closer to U.S.-based General Motors that holds the ninth rank at ₹4.7 lakh crore. On Monday, Maruti’s share price surged by as much as 9.3% to hit a 52-week high of ₹14,120 apiece on the BSE.

Elon Musk’s Tesla continues to top the global leaderboard at a staggering ₹93.2-lakh crore m-cap, far ahead of second-placed Toyota at ₹22.1 lakh crore. China’s electric vehicle majors Xiaomi (₹15.4 lakh crore) and BYD (₹11.9 lakh crore) hold the third and fourth ranks, respectively.

Italian racing icon Ferrari (₹7.2 lakh crore) outpaces several other traditional European auto giants, including BMW (₹5.6 lakh crore), Mercedes-Benz (₹5.2 lakh crore), and Volkswagen (₹5.1 lakh crore). Other notable names rounding out the top rankings include Honda (₹3.9 lakh crore), Hyundai (₹3.4 lakh crore), SAIC Motor (₹2.6 lakh crore), and Seres Group (₹2.6 lakh crore).

Auto stock rally on hopes of a GST rate cut

Monday saw strong buying in the auto sector with the Nifty Auto index rallying nearly 5%, in sync with the broader market, after the government proposed a simplified GST regime with only two slabs at 5% and 18%. Nearly all goods in the 12% slab are likely to move to the 5% slab, while about 90% of those in the 28% slab are likely to be shifted to the 18% slab, easing household budgets through lower retail prices.

If the GST Council adopts the proposed tax structure, then prices of automobiles are likely to fall as the GST on cars and two-wheelers would come down from 28% to 18%, making them affordable to a large section of consumers.

Welcoming the development, all auto heavyweights were trading in positive terrain on Monday, with sectoral leaders such as Maruti Suzuki India, Hero MotoCorp, Tata Motors, Ashok Leyland, and TVS Motor rising between 4% and 9%.

Meanwhile, the BSE Sensex surged by as much as 1,168 points, or 1.44%, to 81,765.77, while the NSE Nifty jumped 390.7 points, or 1.58%, to reclaim the 25,000-level. In the broader markets, the Nifty Midcap100 and the Nifty Smallcap100 indices followed a similar trend, rising by as much as 1.5% each. The strong rally made investors richer by ₹6.76 lakh crore as the total market capitalisation of BSE-listed companies climbed to ₹452.54 lakh crore from ₹445.77 lakh crore at the end of trade on August 14.