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Vehicle Scrappage Policy: All You Need To Know

Prime Minister Narendra Modi announced the Vehicle Scrappage Policy or National Automobile Scrappage Policy at the Investor Summit at Gujarat in August 2021. There are plenty of old vehicles in the country, which is not only a safety hazard but also contribute to pollution. The policy aims to discard old vehicles that are not fit to operate on roads. At the same time, it encourages consumers to buy new vehicles, giving a boost to the automobile industry. 

What Is The Vehicle Scrappage Policy?

Fitness Testing 

Private vehicles older than 20 years and commercial vehicles older than 15 years will have to undergo a fitness test at government-registered ‘Automated Fitness Centres’. In the fitness test, various systems of the vehicle will be tested. If the vehicle passes the test, the owner can re-register the vehicle with a hefty fee. If the vehicle fails the fitness test, it will be deemed as End Of Life Vehicle (ELV) and will be scrapped at an Authorised Vehicle Scrapping Facility (AVSF). The entire initiative will be set up under a Public-Private Partnership (PPP) Model.

The Union Road and Transport Ministry has issued rules for scrapping facilities, their registration, their powers, and scrapping methods to be followed.

Incentives and Disincentives

  • If an owner chooses to scrap the vehicle, they will be given a scrappage value of 4-6% of the ex-showroom price of the vehicle. 
  • A rebate of up to 25% for Passenger Vehicles and 15% on Commercial Vehicles will be given in Road Tax. 
  • A discount of 5% will be given on a new vehicle’s ex-showroom price by the auto-manufacturer. 
  • No registration fees for the new vehicle will be charged. 

What Is The Significance Of The Vehicle Scrappage Policy?

With this policy, the government aims to: 

  • Incentivize scrapping old vehicles and buying new ones. 
  • Ensure that the vehicles plying on road are safe to use, thereby reducing road accidents. 
  • Increase its revenue by charging people who wish to use old vehicles. 
  • Scrapping old metals and spares provides cheap raw materials, which means auto-manufacturers can reduce the cost of production. 
  • Reduce pollution caused by old vehicles.

Vehicles that are not fit to ply on roads are a safety hazard and a leading cause of pollution. India has plenty of such old vehicles. According to a speech made by Transport Minister Nitin Gadkari in Parliament, there are close to 51 lakh Light Motor Vehicles (LMVs) that are above 20 years old and 34 lakh LMVs more than 15 years old. This policy is expected to garner Rs 10,000 crore in investments and create up to 35,000 jobs in the sector, creating a ‘circular economy’. 

Recycling such cars will help reduce the import of Aluminium, Copper, Steel, Iron, and more. This will even boost demand as unfit vehicles will be replaced with better, newer vehicles. This could eventually drive demand for electric vehicles (EVs) as recycled spares could even be used over there too.  

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Market News Top 10 News

PM Modi Launches Vehicle Scrappage Policy – Top Indian Market News

PM Modi launches vehicle scrappage policy

Prime Minister Narendra Modi has launched the ‘Voluntary Vehicle Fleet Modernisation Programme’ or the automobile scrappage policy. The new policy aims to phase out unfit and polluting cars and commercial vehicles which are older than 20 or 15 years, respectively. The scrappage policy will bring in investments of ~Rs 10,000 crore and help India become an industrial hub of automobile manufacturing. The owners who scrap their vehicles will be eligible for a scrap value of 4-6% of the ex-showroom price of that vehicle.

Read more here.

L&T secures order for oxidation reactor from Technip Energies

The heavy engineering arm of Larsen & Toubro (L&T) has secured an order for an oxidation reactor from Technip Energies-India. The order for the technologically critical Titanium Clad Reactor is for a public sector petrochemical project for purified Tereplic sector petrochemical project for purified Terephthalic Acid plant. The scope of supply involves the design, material procurement, fabrication, inspection, and testing of the reactor. 

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Purvankara Q1 Results: Net profit at Rs 154 crore

Purvankara Ltd reported a consolidated net profit of Rs 154.14 crore for the quarter ended June (Q1 FY22). It had posted a net loss of Rs 16.9 crore in Q1 FY21 and a net profit of Rs 8.75 crore in the previous quarter (Q4 FY21). Its revenue from operations jumped nearly three-fold YoY to Rs 542 crore in Q1 FY22. The real estate developer posted a 21% YoY decline in sales bookings to Rs 314 crore during the same period.

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Wockhardt partners with RDIF to manufacture, supply Sputnik vaccines

Wockhardt Ltd has partnered with the Russian Direct Investment Fund (RDIF) and Enso Healthcare to manufacture and supply Sputnik V and Sputnik Light Covid-19 vaccines. Dubai-based Enso Healthcare is RDIF’s coordination partner for sourcing Sputnik V vaccines in India. As part of the deal, Wockhardt will manufacture and supply up to 62 crore doses of the two Sputnik vaccines to Enso over the next two years. The first batch of 5-12 crore doses will be delivered by June 2022.

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Zensar Tech secures multi-million dollar contract from the City of San Diego

Zensar Technologies Ltd has signed a four-year, multi-million-dollar contract with the City of San Diego to provide workplace and enterprise management solutions. The company will provide support to more than 1,000 servers and associated storage and software that host over 300 city application systems in San Diego. Zensar will also expand its support to science, technology, engineering, and mathematics (STEM) education for youth by investing in programs in the San Diego region.

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Grasim Industries Q1 Results: Net profit at Rs 481 crore

Grasim Industries Ltd reported a standalone net profit of Rs 481.6 crore for the quarter ended June (Q1 FY22). It had posted a net loss of Rs 282.9 crore in Q1 FY21. Its revenue from operations jumped 182% YoY to Rs 3,762.68 crore in Q1 FY22. The company’s expenses rose 79.3% YoY to Rs 3,282.34 crore during the same period. Grasim said it expects its businesses to resume their growth trajectory, assuming a low impact of a third wave of the Covid-19 pandemic.

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Tata Power Renewable commissions 100 MW solar project in Gujarat

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Suven Pharma Q1 Results: Net profit rises 14% YoY to Rs 105 crore

Suven Pharmaceuticals Ltd reported a 14% YoY increase in consolidated net profit to Rs 105.08 crore for the quarter ended June (Q1 FY22). Net profit has increased by 26.43% when compared to the previous quarter. Its total income rose 10.5% YoY (or 2.71% QoQ) to Rs 269.58 crore during the same period.

Cadila Healthcare gets USFDA approval for Mesalamine ER capsules

Cadila Healthcare Ltd has received final approval from the US Food and Drug Administration (USFDA) for Mesalamine extended-release (ER) capsules. The drug is indicated for the maintenance of remission of ulcerative colitis (an inflammatory bowel disease) in adults. The approved drug will be manufactured at Cadila’s formulation manufacturing facility as the SEZ, Ahmedabad.

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HAL Q1 Results: Net profit rises 31% YoY to Rs 194 crore

Hindustan Aeronautics Ltd (HAL) reported a 30.9% YoY increase in consolidated net profit to Rs 194.71 crore for the quarter ended June (Q1 FY22). Net profit has declined by 88% when compared to the previous quarter. Its total income declined marginally by 1.01% YoY (or 83.75% QoQ) to Rs 1,765.96 crore during the same period. State-owned HAL is an aerospace and defence company headquartered in Bangalore.

Glenmark Life Sciences Q1 Results: Net profit rises 24% YoY to Rs 101 crore

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Read more here.

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Market News Top 10 News

Nitin Gadkari Announces Vehicle Scrappage Policy in Lok Sabha – Top Indian Market News

Nitin Gadkari announces vehicle scrappage policy in Lok Sabha 

Union Transport Minister Nitin Gadkari, on Thursday, announced the vehicle scrappage policy in the Lok Sabha. The policy will focus on removing vehicles older than 15-20 years from Indian roads. Owners of old vehicles will get strong incentives to scrap old and unfit vehicles. With this policy, raw materials like plastic, aluminium, steel, copper, would be recycled and will become a lesser cost component for the automotive industry. The minister said that states can make registration fees and road tax lower, which would encourage people to buy new vehicles. This ultimately leads to more sales for the automotive industry.

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TGP Rise Fund to invest $200 million in Airtel Africa mobile money business

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Adani Green raises $1.35 billion from 12 international banks

Adani Green Energy Ltd (AGEL) has raised $1.35 billion (~Rs 9,800 crore) debt through definitive agreements signed with a group of 12 international lenders. The funds will initially be used to finance the 1.69 gigawatt (GW) hybrid portfolio of solar and wind renewable projects to be set up in four special purpose vehicles (SPVs) in Rajasthan. This is part of AGEL’s vision of scaling up its renewable energy capacity to 25 GW by 2025.   

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Welspun Corp secures orders worth Rs 777 crore in domestic, overseas markets

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Dilip Buildcon receives financial closure for NHAI road project in Telangana

Dilip Buildcon announced that its wholly-owned subsidiary, Repallewada Highways, has received the financial closure letter from the National Highways Authority of India (NHAI) for a road project in Telangana. The project consists of four-laning of NH-613 from Repallewada to Telangana on hybrid annuity mode (HAM). The project cost is Rs 1140.5 crore.

Bajaj Auto amends dividend distribution policy

Bajaj Auto Limited has amended its dividend distribution policy to reward shareholders and boost return ratios. The policy will consider the surplus the company has while calculating the dividend payout as a percentage of profits after tax (PAT). The dividend payout will be up to 90% if the surplus funds are over Rs 15,000 crore.

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Varroc Engineering to produce EV chargers for Delta-Q Tech

Varroc Engineering Limited said it has entered into a contract manufacturing agreement with Canada-based Delta-Q Technologies Corp. The company will manufacture Delta-Q’s chargers in India to support the expansion of the electric two and three-wheeler market. Varroc Engineering is a leading automotive component manufacturer based in Aurangabad, Maharashtra.

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Ministry of Corporate Affairs investigating irregularities in Edelweiss’ ARC arm: Report

As per reports from multiple sources, the Ministry of Corporate Affairs (MCA) has ordered an inspection of the books of Edelweiss Asset Reconstruction Company (EARC) after a whistleblower wrote to the Prime Minister’s Office and Reserve Bank of India alleging fraud at the firm. The whistleblower has alleged that Edelweiss Group, along with its partner Canadian pension fund Caisse de dépôt et placement du Québec (CDPQ), diverted at least Rs 1,800 crore from EARC. Edelweiss Financial Services Ltd said it has not received any intimation of any inspection being conducted by MCA.

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Delhi HC restrains Future Retail-Reliance deal on Amazon’s plea

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IPO Updates:

Kalyan Jewellers

The Rs 1,175-crore initial public offering (IPO) of Kalyan Jewellers was subscribed 2.61 times on the final day of bidding. The portion reserved for retail investors was subscribed 2.82 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 1.91 and that of qualified institutional buyers (QIBs) 2.76 times.

Suryoday Small Finance Bank

The Rs 582-crore initial public offering (IPO) of Suryoday Small Finance Bank was subscribed 1.01 times on the second day of bidding. The portion reserved for retail investors was subscribed 2 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 20% and that of employees 17%. To know more about the IPO, click here.

Nazara Technologies

The Rs 582-crore initial public offering (IPO) of Nazara Technologies was subscribed 10.55 times on the second day of bidding. The portion reserved for retail investors was subscribed 44.47 times and that of employees 5.33 times. The portion set aside for non-institutional investors (NIIs) saw a subscription of 7.73 times and that of QIBs 72%. To know more about the IPO, click here.