MMTC: This Multibagger PSU Stock Has Given Attractive Returns To Shareholders; Is the Bull Run Ahead?

The share price of MMTC Ltd rose 8.86% at Rs 81.25 per share at 1:25 PM IST on Monday. The lift in MMTC shares was seen though there was no business update or earning update by the PSU stock.

Despite the weakness in the stock market on Friday, shares of MMTC gained 6.38% and hit the Rs 75 mark. In the last five days, the stock has gained almost 40%. The MMTC stock is rightly called a multibagger as the returns from the stock have increased nearly 131%. Meanwhile, the stock's year-to-date (YTD) performance is up 110%.

It is worth mentioning that MMTC recently announced its ambitious mining plans in regard to rare minerals like lithium, cobalt, silicon, etc. The recent jump in the stock's share price can be linked to the Government's nod to the amendment of the Second Schedule of the Mines and Minerals Act for specifying the rate of royalty with respect to three critical and strategic minerals, namely, Lithium, Niobium, and Rare Earth Elements.

The approved royalty rates for lithium, Niobium, and REE are 3%, 3%, and 1%, respectively. Lithium is a critical raw material used to make electric vehicle (EV) batteries. Critical minerals such as Lithium and REEs have also gained prominence in view of India's commitment towards energy transition and achieving net-zero emission by 2070.

Last month, the company's Wholly Owned Subsidiary, MTPL Singapore received notice for its liquidation that was filed by UCO Bank before the general division, High Court of Singapore due to default made by it in repayment of its commercial transactions. MMTC Ltd is a state-owned international trading company engaged in trades, exports, and imports of a range of minerals, precious metals, etc.