Shares of auto component makers ralied after the government approved production linked incentive scheme for auto makers. Shares of automotive axle maker Jamna Auto rallied over 9 per cent to hit an intraday high of Rs 93.70. Varroc Engineering advanced 18 per cent, GNA Axles rose 3 per cent, Pricol advanced 5 per cent, Kranti Industries gained 4.3 per cent, Motherson Sumi rose 2.4 per cent, Sandhar Technologies advanced 4 per cent, Sona BLW Precision Forgings added 3 per cent and Minda Industries gained over 1 per cent.
The measure of auto shares on the National Stock Exchange, Nifty Auto index, advanced 0.5 per cent after the announcement of PLI scheme.
The Union Cabine headed by Prime Minister Narendra Modi cleared Rs 26,000 crore worth new production-linked incentive (PLI) scheme for the auto sector, to boost the production of electric vehicles and hydrogen fuel vehicles. The PLI scheme will generate as many as 7.5 lakh jobs for the auto sector, as per government estimates.
Last year, the government had announced the scheme for the automobile and auto components sector with an outlay of Rs 57,043 crore, for a period of five years.
The PLI scheme for the auto sector is part of the overall production-linked incentives announced for 13 sectors in the Budget 2021-22 with an outlay of Rs 1.97 lakh crore.