Sona BLW Precision Forgings Ltd (Sona Comstar) saw a surge in its share price, reaching a high of Rs 648 at the Bombay Stock Exchange (BSE) after previously closing at Rs 613.25. This rise came after the company achieved certification as the first automotive component maker under the Auto Production Linked Incentive (PLI) scheme. Sona Comstar filed seven applications for different products under the PLI scheme, and it received certification for its hub wheel drive motor for electric two-wheelers. The company’s research and development (R&D) team designed and developed the EV traction motors in-house, launching them for production in 2020. The Auto PLI scheme was introduced by the government in 2021 to incentivize domestic production of high-value advanced automotive technology vehicles and products, with a budgetary outlay of Rs 259 billion over five years starting from FY 2023-24. After reaching Rs 648, the Sona Comstar scrip was trading just below Rs 642 at the BSE.
The surge in Sona Comstar’s share price follows the company’s achievement of becoming the first automotive component maker to receive certification under the Auto PLI scheme. This signifies the company’s success in its efforts to develop high-value advanced automotive technology components. Sona Comstar’s in-house R&D team’s design and development of EV traction motors in 2020 were crucial in achieving this certification, reflecting the company’s commitment to technological innovation. The government’s introduction of the Auto PLI scheme in 2021 has provided further impetus for domestic production of advanced automotive technology, with a substantial budgetary allocation over the next five years. This development is likely to have a positive impact on Sona Comstar’s future prospects, as reflected in the surge in the company’s share price at the BSE.
Sona Comstar’s accomplishment of receiving certification under the Auto PLI scheme is a significant milestone for the company, given that it is the first automotive component maker to achieve this recognition. The company’s successful filing of seven applications under the PLI scheme and its receipt of certification for its hub wheel drive motor for electric two-wheelers highlight its strong position in the automotive components sector. The company’s in-house development and production of EV traction motors in 2020 demonstrate its technological capabilities and readiness to meet the requirements of the Auto PLI scheme. The government’s initiative to incentivize domestic production of advanced automotive technology through the Auto PLI scheme indicates the strategic importance of this sector, with a substantial budgetary outlay allocated over the next five years. Sona Comstar’s share price surge in response to this development reflects the positive market sentiment surrounding the company’s future prospects.
