Business
MSTC surges 15%, MMTC gains 7% as Cabinet clears Delhi-NCR vehicle scrappage scheme
MSTC surges 15%, MMTC gains 7% as Cabinet clears Delhi-NCR vehicle scrappage scheme
About this update from Mstc Ltd.
Shares of scrap-focused miniratna companies MSTC and MMTC surged in morning trade on Thursday after the Union Cabinet approved an incentive scheme to replace old trucks and buses in the Delhi-NCR region, a move expected to boost vehicle scrappage activity.MSTC emerged among the top gainers on the NSE, soaring 14.72 per cent to Rs 512.15 at 10:30 am. Meanwhile, MMTC climbed 6.97 per cent to Rs 69.72.Investor sentiment was buoyed by expectations that the new scrappage policy could increase demand for organised recycling and scrap disposal services, benefiting companies operating in the segment.The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a scheme aimed at phasing out BS-IV and older vehicles registered in Delhi-NCR. Vehicle owners will be incentivised to replace these vehicles with BS-VI-compliant models or electric vehicles (EVs) in an effort to reduce vehicular emissions and improve air quality in the region.MSTC is one of India's largest e-auction platforms and regularly conducts auctions for ferrous and non-ferrous scrap, end-of-life vehicles and surplus assets on behalf of public sector undertakings, government departments and defence establishments.MMTC, through its operations and joint ventures, is engaged in the trading, import, export and auctioning of ferrous and non-ferrous metal scrap, including heavy melting scrap and shredded steel scrap.The government estimates that the scheme will cover around 2.07 lakh vehicle owners across Delhi-NCR, including nearly 1.91 lakh truck owners and 16,329 bus owners spread across Delhi, Haryana, Rajasthan and Uttar Pradesh.To encourage vehicle replacement, the Centre will offer a range of incentives, including a 5 per cent interest subsidy on loans for a period of five years, monthly fuel vouchers of up to Rs 4,800 depending on the vehicle category, and one-time benefits for purchasing electric vehicles or trading certificates of deposit.The scheme entails a total outlay of Rs 9,585 crore, comprising Rs 5,041 crore in Central government support and an estimated Rs 1,601 crore in tax concessions to be provided by participating states.