Synopsis: Shares of state-run trading majors MSTC and MMTC surged up to 15% on Thursday, June 4, 2026, following the Union Cabinet’s approval of a landmark Rs. 9,585 crore vehicle scrappage incentive scheme for the Delhi-NCR region. The policy, targeting the phase-out of over two lakh older commercial vehicles, is expected to heavily drive up e-auction volumes and organized scrap trading activity, unlocking massive revenue runways for both public sector undertakings (PSUs).
Shares of public sector enterprises MSTC and MMTC rallied sharply on June 4, 2026, following the Union Cabinet’s landmark approval of a Rs. 9,585 crore vehicle scrappage incentive scheme. The fresh policy aims to phase out older commercial vehicles across the Delhi-NCR region, prompting an immediate rush of investor buying. Market participants are heavily accumulating both stocks on expectations that the multi-crore mandate will dramatically accelerate domestic scrap generation and electronic auction volumes, opening up highly lucrative business channels for these state-run trading majors.
Leading the rally, MSTC Ltd (with a market capitalization of Rs. 3,600.96 crore) emerged as a primary beneficiary. The stock surged an impressive 14.57% to trade at Rs. 511.50, up from its previous close of Rs. 446.45. Throughout the volatile trading session, MSTC touched an intraday high of Rs. 523.75 and a low of Rs. 448.00. Backed by an asset-light transaction model, the company currently trades at a price-to-earnings (P/E) ratio of 14.09, sitting roughly 11.00% below its 52-week high of Rs. 574.95 as investors price in the upcoming influx of digital auction pipelines.
In tandem, MMTC Limited also witnessed strong buying momentum, reflecting its substantial exposure to bulk metal trading and organized scrap distribution networks. Commandingly valued at a market capitalization of Rs. 10,273.50 crore, MMTC’s share price climbed 4.94% to reach Rs. 68.40 against its previous close of Rs. 65.18. The counter recorded an active intraday high of Rs. 71.28 and a low of Rs. 64.54 during Thursday’s early market hours. The stock is currently valued at a P/E ratio of 46.10, as the street factors in how the massive influx of dismantled commercial fleets will feed directly into the nation’s industrial raw material ecosystem.
Under the newly approved scheme, around 2.07 lakh BS-IV and older trucks and buses operating in Delhi-NCR will be encouraged to transition to cleaner BS-VI-compliant or electric vehicles. The initiative covers approximately 1.91 lakh trucks and over 16,000 buses across Delhi, Haryana, Uttar Pradesh, and Rajasthan. The central government will contribute over Rs. 5,000 crore toward the scheme, while participating states are expected to provide additional tax concessions and incentives.
The policy aims to address one of the region’s biggest environmental challenges. Although older trucks and buses account for a relatively small share of the vehicle population, they contribute disproportionately to transport-related pollution. By accelerating the replacement of aging commercial vehicles, the government hopes to reduce emissions and improve air quality across the National Capital Region.
The market’s reaction reflected the belief that the scrappage programme could create a large and predictable flow of end-of-life vehicles into the organised recycling ecosystem. MSTC emerged as the biggest beneficiary, with its shares jumping nearly 15% during the session. Investors see the company as a direct play on rising scrappage volumes because of its strong presence in e-auctions and government-backed disposal platforms.
As one of India’s leading e-auction service providers, MSTC conducts auctions for scrap materials, surplus government assets, and end-of-life vehicles. A large-scale scrappage drive involving more than two lakh commercial vehicles could significantly increase auction volumes on its platforms, potentially boosting transaction-based revenue over the coming years.
MMTC also gained nearly 7% as investors anticipated higher availability of ferrous and non-ferrous scrap generated from dismantled vehicles. The company has exposure to the trading and auctioning of metal scrap, and an increase in scrap supply could support higher trading activity and revenue generation. However, analysts generally view MMTC as a more indirect beneficiary compared to MSTC, whose business model is more closely linked to the scrappage and auction process.
The policy announcement comes at a time when MSTC’s core business is already showing strong operational performance. Over the years, the company has transformed itself from a traditional commodity trading enterprise into a high-margin e-commerce and e-auction platform. While revenue has become smaller compared to its historical trading business, profitability has improved significantly due to the asset-light nature of its digital operations.
For FY26, MSTC reported healthy growth in operating profit and maintained strong return ratios, supported by operating margins close to 60%. The company also continues to reward shareholders through dividends, making it one of the higher-yielding PSU stocks in the market. Investors believe the new scrappage policy could provide an additional growth catalyst by increasing auction volumes without requiring major capital expenditure.
The sharp rally in MSTC and MMTC highlights how policy decisions can create immediate opportunities for companies positioned within a specific value chain. While the direct beneficiaries of the scrappage scheme will ultimately be vehicle owners, recyclers, and automobile manufacturers, investors are increasingly focusing on ancillary players that stand to gain from the expected surge in organised scrap processing and auction activity.
With implementation of the scheme expected over the coming years, market participants will closely monitor how quickly scrappage volumes begin flowing into the organised ecosystem and whether companies such as MSTC and MMTC can translate the policy tailwind into sustained earnings growth. For now, the government’s aggressive push to modernise India’s commercial vehicle fleet has given both PSU stocks a powerful near-term trigger and renewed investor attention.
MSTC Limited
Incorporated in 1964, MSTC Limited (formerly Metal Scrap Trade Corporation) is a leading Miniratna Category-I public sector enterprise under the Ministry of Steel. The company has evolved from a traditional canalizing agent for scrap imports into India’s premier e-commerce and e-auction service provider. Operating an asset-light digital platform, MSTC specializes in the transparent marketing and disposal of ferrous and non-ferrous scrap, surplus stores, end-of-life vehicles, and government assets, commanding high operating margins through its transaction-based revenue model.
MMTC Limited
Established in 1963, MMTC Limited (Metals and Minerals Trading Corporation of India) is a premier Navratna public sector undertaking under the Ministry of Commerce and Industry. As one of India’s largest international trading houses, the company handles bulk cargo operations spanning minerals, metals, precious metals, fertilizers, and agro-products. Leveraging its extensive global network, MMTC plays a crucial role in the canalization, logistics, and organized trading of industrial raw materials and metallic scrap across domestic and international markets.
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