Chambal Fertilisers to exit shipping business

The company has decided to exit the shipping business in view of the long-term shipping industry outlook and the requirement of funds for a new ammonia-urea project, proposed to be set up in Rajasthan’s Kota district.

Chambal Fertilisers & Chemicals Ltd. on Tuesday said that its Board of Directors has approved a plan to sell its shipping business due to unfavourable outlook for global trade.

The company has decided to exit the shipping business in view of the long-term shipping industry outlook and the requirement of funds for a new ammonia-urea project, proposed to be set up in Rajasthan’s Kota district.

The sale is subject to the approval of the company's shareholders, Chambal Fertilisers told stock exchanges on Tuesday.

Chambal Fertilizers said that the Board gave its in-principle consent to the sale or disposal of one or more or all of the five ships owned by the company; or sell, transfer or dispose of the entire shipping undertaking or business of the company on slump sale basis or some other appropriate structure.

“The proposed transaction(s) will be consummated as and when the company receives commercially viable and acceptable offers from third parties in this regard,” the company said.

In 2004, Chambal Fertilisers had decided to enter the energy transportation sector and acquired India Steamship Co. Ltd., one of India’s oldest shipping companies.

Currently, India Steamship has a fleet capacity of over 5,00,000 DWT in the form of five Aframax tankers.

Fertilizer subsidy dues to touch Rs. 45,000 crore by end-March

The Centre had allotted Rs. 72,659 crore towards fertiliser subsidy for FY16

Subsidy dues to the fertilizer industry are likely to touch Rs. 45,000 crore by the end of FY16 owing to insufficient allocation in the Union Budget, lobby group Fertiliser Association of India (FAI) said on Monday.

The Centre had allotted Rs. 72,659 crore towards fertiliser subsidy for FY16. 

However, out of this amount, Rs. 7,000 crore was used to repay bank loans for FY15, leaving Rs. 65,969 crore for this year’s payment to the fertilizer industry.

"Expenditure on account of the subsidy does not reflect in the Budget and manufacturers have to bear an interest burden of nearly Rs. 3,500 crore due to the pending dues," FAI Director Satish Chander said on Monday.

“We get only 25% of our payments from the farmer as 75% of the price of urea is the subsidy amount for which we have to chase the Government every year,” Chander said.

“Budget for subsidy on urea was exhausted in August this year and as of now pending dues to the industry is more than Rs. 30,000 crore,” he added.

Rs. 7,000 cr urea subsidy announcement fails to lift fertilizer shares

Despite benchmark indices S&P BSE Sensex and CNX Nifty rose by 0.86% and 0.88% respectively some fertilizer shares dropped 1-4% in the day. However, shares of some fertilizers company gained 0.25-1.75%

The Cabinet Committee on Economic Affairs (CCA) chaired by the Prime Minister Narendra Modi, recently approved a Special Banking Arrangement (SBA) for a loan of Rs.7,000 cr to be given to the fertilizers company as urea subsidy. But, the announcement failed to attract investors as most of the fertilizers shares tumbled in the day.

Despite benchmark indices S&P BSE Sensex and CNX Nifty gaining by 0.86% and 0.88%  respectively some fertilizers shares dropped 0.93-4.69% in the day. However, shares of some fertilizers company gained 0.25-1.75%.

Shares of Dharamsi Morarji crashed by 4.69% to Rs. 63.05 on BSE. Shares of Shiva Global crashed by a whopping 5.7% and closed the day at Rs. 19.85, Bharat Agri closed 2.33% lower at Rs. 90.15, Madras Fertilizers dropped 2.25% to Rs. 13.01 and Coromandal International dipped by 2.09% to Rs. 190.15.

Among notable gainers today, Zuari Agro Chem rose by 1.75% to Rs. 162.80, JK Agri surged by 1.16% to Rs. 195.20 and Deepak Fertilizers soared by 1.10% to Rs. 132.80.

Is is to be noted that in past three and a half months, shares of 12 out of 19 fertilizers companies have crashed up to 6-36%, whereas shares of 7 companies have risen 4-122%.

Among the losers, Mangalore Chem (down 35.92%), Bharat Agri (down31%), Coromandal International (down 23.34%), Shiva Global (down 21%), Zuari Agro Chem (down 16.87%), Madras Fertilizers (down 12.78%) and Basant Agro is down by 12.69%.

Offering positive returns, Dharamsi Morarji is up 122%, Rama Phosphates (up 27.54%), Gloster Ltd (up 26.58%), National Fertilizers (up 3.65%), GSFC (up 3.58%), Chambal Fertilizers (up 3.15%) and shares of GNFC are up by 3.13% since June 30, 2015.

A consortium of Public Sector Banks led by State Bank of India (SBI) and Punjab National Bank (PNB) has been formed for settlement of outstanding indigenous urea subsidy bills to the tune of Rs. 7,000 cr to the fertilizer companies in 2014-15.

National Fertilizers begins production in Bhatinda Unit

The company has informed that after completion of shutdown, urea plant has resumed production w.e.f. June 7, 2015.

National Fertilizers Limited has announced that this is that the Bhatinda Plant was to remain under Annual Turn around w.e.f. May 11, 2015 and was expected to resume production by 30-35 days.

The company has informed that after completion of shutdown, urea plant has resumed production w.e.f. June 7, 2015. 

Deepak Fertilisers clarifies reports on MCF stake sale

Deepak Fertilisers & Petrochemicals Corporation Ltd clarified "We would like to inform you that the news article published in the Business Standard on 19th March, 2015 is not based on any information from the Company. 

The Exchange had sought clarification from Deepak Fertilisers & Petrochemicals Corporation Ltd with respect to news appearing on Business Standard on March 19, 2015 titled "Deepak Fertilizers may sell MCF stake"

Deepak Fertilisers & Petrochemicals Corporation Ltd clarified "We would like to inform you that the news article published in the Business Standard on 19th March, 2015 is not based on any information from the Company.

Hence, we cannot comment on the contents of the article."

Fertiliser shares in focus on hopes Budgetary sops

RCF, Chambal Fertiliser, FACT are some of the prominent gainers. 

Shares of fertiliser companies are in focus today owing to media reports of making fuel prices more affordable to these companies in the upcoming Union Budget.

According to reports, the oil ministry has proposed to pool or average out prices of domestic natural gas and imported LNG used by fertiliser plants to make the cost of fuel uniform and affordable. The ministry has also asked for service tax on imported LNG for pool to be waived.

Following which, the fertilisers shares are trading on a higher note today. Southern Petrochemical has zoomed 5 per cent to Rs. 21.05.

Rashtriya Chemicals & Fertilisers (RCF) and National Fertilizers have surged over 4 per cent each to Rs. 73 and Rs. 41.50, respectively.

Chambal Fertilisers & Chemicals and Fertilizers and Chemicals Travancore (FACT) have rallied nearly 3 per cent each to Rs. 71.80 and Rs. 34.60, respectively.

Gujarat State Fertilizers & Chemicals (GSFC) and Gujarat Narmada Valley Fertilizers are also up over a per cent each.

Meanwhile, the Sensex has recouped some of the losses and is now down 57 points at 29,263