RCF got a veritable boost from reports that conglomerates like Tatas and Birlas are keen on buying stake in the company.
The scrip of the state-run fertilisers major jumped up 4.17% to Rs 20 by 10:15 IST. Substantial volumes of over 180,000 shares were notched up on the counter. In the 12 sessions between 31 March and 17 April 2003, the scrip of Rashtriya Chemical & Fertilisers rose 50% to Rs 19.20 from Rs 12.80, spurred on by the divestment initiative.
Today's rise is attributed to reports that the Tata group company Tata Chemicals and the Aditya Birla group company Indo Gulf Fertilizers are expected to submit expressions of interest to acquire the government's 51% stake in the company.
Last week, at a meeting of the Cabinet Committee on Disinvestment, the government decided to sell 51% stake in the company. Currently, the government holds 92.5% stake in RCF.
RCF is the largest gas-based fertiliser and chemicals manufacturer in the country, with an installed capacity of 1.16 million tonne. It has manufacturing units at Thal (Raigad district in Maharashtra) and Trombay near Mumbai. The company produces nitrogenous, phosphatic, and potash fertilisers along with a wide range of industrial chemicals. Fertilisers contribute 80% of its turnover. Since it has a depreciated plant, the cost of producing urea is low compared to international companies.
RCF has embarked upon an ambitious investment plan of Rs 2,700 crore (Rs 27 billion) over the next three to five years for modernisation of its Trombay and Thal plants. The plan is to make the units safer and more environment friendly. The company, which proposes to achieve a turnover of Rs 5,000 crore (Rs 50 billion) to take on global competition in the wake of WTO regime, will fund these schemes through internal accruals without government of India support
For Q3 ended 31 December 2002, RCF reported a 138% jump in net profit to Rs 26.21 crore compared to Rs 11.03 crore in the corresponding period of the previous year. Total income (net of excise) increased 18.5% to Rs 537.46 crore (Rs 5.37 billion) from Rs 453.59 crore (Rs 4.53 billion) in DQ2001.
More Hot Pursuits