Leading automotive companies Mahindra & Mahindra as well as Tata Motors are set to recieve incentives worth Rs 246 crore for FY24, likely to be paid during Q4FY25, as claimed under the PLI scheme. Shares of auto companies were sharply higher on January 2, riding on strong sales growth in December as well as the PLI benefits.
Minister for Heavy Industries and Steel H D Kumaraswamy said he was satisfied with the progress made by auto original equipment manufacturers (OEMs) in localized manufacturing.
Tata Motors reportedly submitted an incentive claim of Rs 142.13 crore, based on FY24 sales. Mahindra & Mahindra submitted an incentive claim of Rs 104.08 crore, based on incremental sales for FY24.
As part of the PLI scheme, incentives of 13-18 per cent are offered for components related to EVs and hydrogen fuel cells, while other Advanced Automotive Technology (AAT) components receive incentives of 8 per cent and 13 per cent.
Auto stocks were in the fast lane on January 2, with heavyweights like Eicher Motors, Bajaj Auto, Hero MotoCorp, M&M, Maruti Suzuki, and Tata Motors roaring ahead by up to 7 percent. The rally fueled the Nifty Auto index to its biggest single-day gain in six months, turbocharged by better-than-expected sales figures.
As of September 2024, the PLI scheme has already facilitated an investment of Rs 20,715 crore in the sector, leading to incremental sales of Rs 10,472 crore, as per a government official. More eligible applicants under the PLI scheme are expected to commence production of auto and auto components soon. FY25 marks the first year of incentives for car companies under the new PLI scheme which will run till FY29.
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