The move is expected to boost vehicle scrappage and increase demand for organised recycling services.

MSTC jumped 14.06% while MMTC rose 8.09%.

The two-year scheme, approved by the Cabinet chaired by Prime Minister Narendra Modi, aims to reduce vehicular pollution by encouraging owners of BS-IV and older trucks and buses to switch to BS-VI-compliant or electric vehicles.

The programme is expected to benefit around 2.07 lakh vehicle owners across Delhi, Haryana, Rajasthan and Uttar Pradesh. This includes about 1.91 lakh trucks and 16,329 buses.

Under the scheme, owners of BS-III and older vehicles will be required to scrap their vehicles at registered scrapping facilities. BS-IV vehicles can either be scrapped or sold outside the NCR in non-NCAP cities and towns. Eligible owners must purchase and register a BS-VI-compliant or electric vehicle within NCR to avail benefits.

The Centre will provide a 5% interest subsidy on vehicle loans for five years, monthly fuel vouchers worth up to Rs 4,800, and one-time incentives for EV purchases or certificate trading. Participating states will waive registration fees and offer motor vehicle tax concessions, while automobile manufacturers will provide an 8% discount on ex-showroom prices.

The total outlay of the scheme stands at Rs 9,585 crore. This includes Rs 5,041 crore from the Central Government and an estimated Rs 1,601 crore in tax concessions from participating states.

Investors cheered the announcement as higher vehicle scrappage is expected to increase the supply of recyclable metal scrap and end-of-life vehicles.

According to government estimates, trucks and buses account for 36% of PM2.5 emissions from the transport sector despite representing only 3% of the vehicle fleet in Delhi-NCR. A pre-BS vehicle can emit pollution equivalent to as many as 14 BS-VI-compliant heavy vehicles, highlighting the potential environmental benefits of the scheme.

MSTC operates one of India's largest e-auction platforms. It auctions ferrous and non-ferrous scrap, end-of-life vehicles and surplus assets for government departments, defence establishments and public sector undertakings.

MMTC is engaged in the trading, import, export and auctioning of ferrous and non-ferrous metal scrap through its operations and joint ventures.