GMDC shares rise for third straight session, up 7% on government rare earth incentive

Gujarat Mineral Development Corporation (GMDC) shares extended their upward momentum for a third consecutive day on Thursday, surging 7% amid strong buying interest following a key government announcement.

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a Rs 7,280-crore incentive scheme aimed at boosting India’s domestic production of critical minerals and reducing dependence on China.

The program addresses the shortage of rare earth magnets, aiming to create 6,000 metric tons per annum of production capacity, Union Minister Ashwini Vaishnaw said during the cabinet briefing. Over the next three years, India will set up five units, each with 1,200 tons per annum capacity, as part of the seven-year initiative focused on integrated manufacturing facilities.


India is joining a growing list of countries seeking a larger share of the rare earth magnet supply chain. China, which currently processes about 90% of global output, imposed export restrictions in April amid a trade dispute with the US, affecting access for automakers and other industries worldwide.

The government’s scheme is expected to provide financial incentives, tax benefits, and support for domestic manufacturers, creating opportunities for companies like GMDC to expand mining and processing operations at lower costs. GMDC, a key player in bauxite, rare earth minerals, and lithium exploration, stands to benefit from rising demand and government backing.

Investors have responded positively, with GMDC’s stock rally reflecting market optimism about potential revenue growth and a strengthened strategic position in India’s push for self-reliance in critical minerals.

Over the past three months, GMDC’s stock has gained approximately 38%. It currently trades at a price-to-earnings (P/E) ratio of 16.74 and a price-to-book (P/B) ratio of 2.62, highlighting its valuation relative to earnings and book value.

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