MSTC not 'scrap' any more

MSTC was in focus in Monday’s intraday trade, rising around 3% to Rs. 710 after the Delhi government approved the Delhi EV Policy 2026, which includes scrappage incentives and purchase subsidies to accelerate electric vehicle adoption. The stock touched an intraday high of Rs. 721.15, close to its 52-week high of Rs. 724.90, before paring some gains.

Key points of Delhi EV Policy 2026

• The Delhi government has approved the Delhi EV Policy 2026.
• The policy will remain in force until March 31, 2030.
• The objective is to accelerate electric vehicle adoption and reduce vehicular emissions in the national capital.
• The policy focuses on replacing older, polluting BS-IV or older vehicles with zero-emission electric vehicles.
• Owners replacing BS-IV or older two-wheelers with EVs will be eligible for an additional scrappage incentive of Rs. 10,000.
• Owners replacing older three-wheelers with EVs will receive a scrappage incentive of Rs. 25,000.
• Owners of N1 commercial trucks will be eligible for scrappage incentives of up to Rs. 50,000.
• Owners of BS-IV or older four-wheelers switching to electric cars will receive a scrappage incentive of Rs. 1 lakh.
• These scrappage incentives will be available in addition to purchase subsidies under the policy.
• The government has announced 100% exemption from road tax and registration fees for all pure electric vehicles.
• For electric four-wheelers, the exemption will apply to vehicles with an ex-showroom price of up to Rs. 30 lakh.
• The policy targets installation of 32,000 public EV charging points.
• It also provides for phased mandates for electric commercial vehicles.
• The policy includes phased mandates for electric two-wheelers.
• Institutional fleets will also be brought under phased electrification mandates.

The broader aim is to improve Delhi’s air quality by encouraging faster replacement of older internal combustion engine vehicles with EVs.

How this benefits MSTC directly?

MSTC benefits from the policy because the core thrust is on vehicle scrappage and organised disposal of older vehicles. As a PSU involved in scrap handling, surplus asset disposal and e-auction services, MSTC is viewed as a direct beneficiary if the policy leads to higher scrappage volumes.

The scrappage incentives create a financial reason for owners of BS-IV or older vehicles to retire their vehicles and switch to EVs. This can increase the flow of old vehicles into the formal scrappage and recycling ecosystem, where MSTC can benefit through auctioning, disposal, scrap aggregation and related transaction-based services.

The benefit is not from EV subsidies directly. MSTC does not gain because people buy EVs. It gains if more old vehicles are scrapped, auctioned, recycled or disposed of through organised channels. Higher scrappage volumes can support MSTC’s e-commerce and auction revenue, improve visibility for its recycling-linked business, and create more opportunities if government agencies use PSU-backed platforms for disposal.