As the government signs agreements with manufacturers of specialized steel under the PLI scheme, steel stocks rise.

After Thursday’s selloff, there was a slight recovery in metal stock prices on March 17. Today, when steel producers signed contracts with the government for the PLI scheme, investors flocked to acquire steel stocks. Union Minister of Steel Jyortiraditya Scindia stated at the PLI Scheme for Specialty Steel MoU signing event that the government intends to implement the second edition of the PLI scheme for specialty steel to increase the production of value-added steel in the nation.

The Steel Ministry and as many as 27 steel businesses signed 57 memoranda of understanding at the event to create coated or plated steel goods, high-strength or wear-resistant steel, specialty rails, alloy steel products, steel wires, and electrical steel, according to the article. These products have several uses in the white goods, automotive, and defense industries, industrial machinery, etc.

As a result, the domestic steel industry will receive an additional Rs 30,000 crore in investment, adding 25 million tonnes of capacity annually. The PLI scheme is thought to support domestic manufacturing by incentivizing local businesses to establish new manufacturing facilities or expand those that already exist, which will reduce imports.

Shares of the Steel Authority of India, Kalyani Steels, Jindal Steel & Power, Tata Steel, and JSW Steel all saw gains of 2-4 percent on the BSE. Analysts believe smaller competitors may gain in terms of sales growth and profit expansion, though. The addressable market for specialized steel is smaller than that for regular steel, hence the number of incentives may not be as considerable for large players.

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