Rashtriya Chemicals & Fertilisers spurted on Friday on the back of reports that the CCD will consider the company's privatisation at its meeting next week.
The scrip of the state-run fertilisers major was up by 9.4% at Rs 16.80 on the BSE in early-afternoon trades. 302,000 shares changed hands on the counter by the first half of the session.
The Rashtriya Chemicals & Fertilisers stock slipped from its higher levels on Thursday after witnessing a rally in the last few sessions on divestment hopes. From a low of Rs 12.90 on 31 March 2003, the scrip rallied by 27.9% in 7 sessions to a recent high of Rs 16.50 on 9 April 2003. It slipped to Rs 15.35 on Thursday.
The RCF stock has witnessed alternate bouts of buying and selling in the last few months, with the scrip moving in range of Rs 13-20.
The scrip bounced back today following reports that a meeting of the Cabinet Committee on Disinvestment is scheduled early next week (on 15 April 2003). The CCD will consider divestment of RCF, reports said. The government, which holds 92.5% stake in RCF, is keen to sell 51% to a strategic partner.
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.
For Q3 ended December 2002, RCF reported a 138% jump in net profit to Rs 26.21 crore. The company posted a profit after a net loss of Rs 121.67 crore (Rs 1.21 billion) and Rs 11.80 crore recorded in the second and first quarters ended September and June 2002 respectively. The good Q3 results were mainly achieved due to higher sales growth. Net sales grew by 18.5% in Q3 to Rs 529.88 crore (Rs 5.29 billion).
RCF has embarked upon an ambitious investment plan of Rs 2,700 crore (Rs 27 billion) in the next three to five years involving modernisation schemes for its Trombay and Thal plants. The proposed plan is to make these units more safe and environment- friendly.
RCF, which proposes to achieve a turnover of Rs 5,000 crore (Rs 50 billion) to take on global competition in the wake of World Trade Organisation regime, would fund these schemes through internal accruals without the Government of India's support.
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