Auto stocks rise as Nitin Gadkari makes six airbags mandatory; Tata Motors, Rane Madras surge

Auto stocks were in focus on Monday after Transport Minister Nitin Gadkari Friday made it compulsory for private vehicles carrying up to eight passengers to have six airbags.

Gadkari approved a draft gazette notification making 6 airbags compulsory for private vehicles carrying up to 8 passengers to "ensure the safety of passengers across all segments, irrespective of the cost or variant of the vehicle," he said. Meaning, the said cars must have two side torso airbags and two side curtain airbags, covering all outboard passengers. The driver seat and co-passenger seat airbag was made mandatory in July 2019 and January 2022, respectively.

Nifty Auto surged over 2 percent early on Monday led by four-wheeler stocks. Tata Motors surged 3 percent to Rs 524 while Mahindra & Mahindra surged 1.5 percent. Maruti Suzuki also rose over 3.5 percent to Rs 8,368, an intraday high.

At the last count, Tata Motors was trading at Rs 524, up over 2.8 percent. Mahindra and Mahindra shares were up over half a percent to Rs 887. And Maruti Suzuki rose over 2.5 percent to trade at Rs 8,297.

Airbags are an auto ancillary manufactured in India by listed companies Bosch and Rane Madras Ltd.

Rane Madras manufactures airbags and seatbelt assemblies, among other auto components. It supplies to companies like Mahindra and Mahindra, Ford India, Renault Nissan, Maruti Suzuki, and others.

Its shares surged over 10 percent on Monday to an intraday high of Rs 452. At the last count, Rane stocks were up over 8 percent to Rs 440.

The shares of Bosch Ltd, a leading manufacturer of airbags in India, surged over 2.5 percent to an intraday high of Rs 17,929. At the last count, it was up 0.8 percent to Rs 17,645.