Shares of MSTC surged in Thursday's trade after the Union Cabinet approved a Rs 5,041 crore scheme to replace old BS-IV trucks and buses in Delhi-NCR with BS-VI and electric commercial vehicles yesterday. This policy is expected to result in a wave of organised vehicle scrappage activity.
MSTC emerged as one of the top gainers on the NSE gaining as much as 17.31%, and coming down to trading 12.95% higher at Rs 504.25 at 11:30 am, while MMTC, another scrappage focused stock, climbed 7.01% to Rs 69.75.
The programme offers a comprehensive package of financial benefits to encourage owners of older commercial vehicles to switch to cleaner, more efficient alternatives. Under the scheme, eligible vehicle owners will receive a 5% interest subvention on loans taken to purchase replacement vehicles.
To further ease operating costs, monthly fuel vouchers will be provided for five years through oil marketing companies.
To qualify, vehicle owners must either scrap their old vehicles at authorised Registered Vehicle Scrapping Facilities (RVSFs) or sell them in cities that are not covered under the NCAP framework. They must then purchase and register a new or used BS-VI-compliant vehicle, or an electric vehicle, within the Delhi-NCR region.
A key highlight of the package is the support from state governments, which will provide a 100% concession on motor vehicle tax and waive registration fees for newly purchased BS-VI or electric vehicles.
Owners opting for used BS-VI vehicles will receive a 50% concession on these charges. The incentives will remain valid for a period of 10 years.
The government expects the initiative to reduce emissions from older commercial vehicles, improve air quality in the region, and encourage a faster transition towards cleaner transportation technologies.
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