Amara Raja, Exide shares rise up to 5% after lithium-ion batteries included as 'core auto components'

Amara Raja and Exide shares have fallen 10 and 12 percent each since the start of the year.

Shares of battery makers Amara Raja and Exide Industries surged 5 and 4 percent respectively on  26, after the Centre expanded the safe harbour threshold to include lithium-ion batteries to be used in electric or hybrid electric vehicles as 'core auto components', raising the limit to Rs 300 crore from present Rs 200 crore.

The move is expected to benefit battery makers by lowering compliance risks, encouraging investment, and strengthening India’s electric vehicle (EV) ecosystem. Lithium-ion batteries have now been classified as 'core auto components' under the rule, implying that companies importing them can now have their declared transfer prices accepted without heavy scrutiny.

Follow our LIVE blog for all the latest market updates

When companies do business across borders, they may buy and sell goods between their subsidiaries, and the price at which these transactions occur is called the transfer price. Tax authorities closely monitor these prices to ensure companies aren’t manipulating them to shift profits to lower-tax countries.

The CBDT’s safe harbour expansion implies as long as companies declare transfer prices within the prescribed range, tax authorities will accept them without question. This removes a key regulatory overhang and ensures a smoother import process for EV battery components.

Also Read: March records sharpest retail sell-off since Dec 2023; net selling at Rs 9,200 crore

At about 10:40 am, shares of the company were trading at Rs 1,080, higher by 2 percent from the last close on the NSE. On the other hand, Exide Industries shares trading at Rs 365, up over a percent from the last close. Amara Raja and Exide shares have fallen 10 and 12 percent each since the start of the year.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.