Rare earth play GMDC extends upmove with another 8% surge

Shares of Gujarat Mineral Development Corporation Ltd. (GMDC) gained as much as 8% on Thursday, November 27, extending gains for a third straight session as investors cheered a major policy move from the Centre.

The Union Cabinet, led by Prime Minister Narendra Modi, has cleared a ₹7,280 crore incentive scheme to accelerate India's domestic production of critical minerals and cut reliance on China.

The initiative aims to address the shortage of rare earth magnets by creating a 6,000-metric-ton annual capacity, Union Minister Ashwini Vaishnaw said after the meeting.

Over the next three years, five manufacturing units of 1,200-ton capacity each will be set up as part of a broader seven-year plan to build end-to-end facilities in India.

The move aligns India with other global economies trying to reduce exposure to China, which currently handles about 90% of the world's rare earth processing. Beijing's export curbs earlier this year, imposed during its trade dispute with the US, tightened supply for automakers and other industries worldwide.

The new scheme is expected to offer financial incentives, tax support, and other benefits to local producers. For GMDC, which has interests in bauxite, rare earth minerals, and lithium exploration, the policy shift could lower development costs and unlock new opportunities in mining and processing.

The market reaction has been upbeat, with GMDC shares rallying on expectations of stronger revenue prospects and a reinforced position in India's critical minerals value chain.

Over the last three months, the stock has risen about 38%. GMDC is currently trading at a P/E of 16.74 and a P/B of 2.62.