The Ministry of Road Transport and Highways (MoRTH) has introduced the Voluntary Vehicle Modernization Program, also known as the Vehicle Scrapping Policy, to create an ecosystem for phasing out unfit polluting vehicles across India
This initiative will be carried out through a network of Registered Vehicle Scrapping Facilities (RVSFs) and Automated Testing Stations (ATSs).
Currently, more than 60 RVSFs are operational across 17 states, alongside over 75 ATSs in 12 states, with many more in the pipeline.
MoRTH has further announced that multiple Commercial and Passenger Vehicle Manufacturers are offering limited-time discounts for buyers who present a Certificate of Deposit (CoD) or Scrappage Certificate under the Vehicle Scrapping Policy.
Commercial Vehicle (CV) manufacturers are offering these discounts for up to two years, while Passenger Vehicle (PV) manufacturers are extending the discount for one year.
Several companies are providing discounts of up to 1.5 percent of the ex-showroom price of a new vehicle or Rs. 20,000—whichever amount is lower—if the owner has scrapped a PV within the last six months.
Also Read: Fundamentally strong stocks with promoter holding of more than 70%
These Original Equipment Manufacturers (OEMs) discounts are in addition to the scrap value offered by Registered Vehicle Scrapping Facilities (RVSFs) and other existing government incentives.
In an official statement issued on August 28, MoRTH noted that information about the scrapped vehicle will be linked with the VAHAN system. Additionally, automakers may voluntarily offer extra discounts on specific models.
Below are a few listed companies that could potentially benefit from the Vehicle Scrapping Policy:
Eco Recycling Limited
With a market cap of Rs. 1,968.27 crores, the shares of India’s first and one of the leading e-waste management companies were trading at Rs. 1,020.00 apiece on BSE in today’s trading session.
The stock has delivered multibagger returns of nearly 472 percent in one year as well as around 150 percent returns year-to-date.
Eco Recycling operates in the recycling sector through its subsidiary ELV Recycling Private Limited focuses on the dismantling and recycling of end-of-life vehicles (ELVs). Its operations include the safe disposal of hazardous materials, the dismantling of vehicles, and the recycling of valuable components.
Eco Recycling Limited is primarily involved in the e-waste collection, disposal and recycling business that offers comprehensive services for recycling electrical electronic equipment (EEE) waste.
Gravita India Limited
With a market cap of Rs. 16,027.15 crores, the stock surged by 2.10 percent on BSE to Rs. 2,321.50 apiece Today.
While Gravita India is primarily known for its battery recycling operations, particularly for lead-acid batteries, it also engaged in the broader recycling sector, which includes the processing of materials from end-of-life vehicles (ELVs).
The stock has delivered multibagger returns of nearly 193.87 percent in one year as well as around 114.20 percent returns year-to-date. Gravita India Limited is engaged in the business of manufacturing and recycling of lead, aluminium and plastics.
With a market cap of Rs. 3.45 lakh crores, the stock dipped by 1.07 percent on BSE to Rs. 2,776.00 apiece today.
On 7th April 2021, M&M signed a Memorandum of Understanding (MoU) with Mahindra MSTC Recycling Private Limited (MMRPL) towards offering an end-to-end solution for scrapping vehicles.
MMRPL is engaged in the business of acquiring used/end-of-life vehicles (ELV) to dismantle and scrap it under the brand name of CERO.
The stock has delivered positive returns of nearly 77.2 percent in one year as well as around 64.7 percent returns year-to-date.
Incorporated in 1945, Mahindra & Mahindra Limited is one of the most diversified automobile companies in India with a presence across 2-wheelers, 3-wheelers, PVs, CVs, tractors and earthmovers.
Written by Shivani Singh
Also Read: Smart meter stock with orders worth ₹ 11,000 Cr in just 15 days to keep an eye on
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
