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The government has invited bids to appoint merchant bankers and selling brokers to divest part of its stake in two fertilizer companies – National Fertiliser Limited (NFL) and Rashtriye Chemical and Fertiliser Limited (RCFL).
According to the proposal floated by the Department of Investment and Public Asset Management (DIPAM), the government proposes to sell 20 per cent of its stake in NFL and 10 per cent in RCFL. The share price of NFL was up by 1.78 per cent during mid trading on BSE while a share of RCFL was trading with 3.27 per cent gain over the previous day closing.
The central government holds 74.71 per cent of shares in NFL. Disinvestment of 20 per cent stake will take place through the ‘Offer for Sale’ (OFS) method of shares by promoters through the stock exchanges. The government is also considering allotting shares to eligible and willing employees of NFL at a discount on the Issue / discovered price (lowest cut-off price).
NFL has an authorised capital of ₹1,000 crore, and a paid-up capital of ₹490.58 The company employed 3,339 regular employees as on March 31, 2020. Half yearly (Quarter ending September 2020) profit after tax for the fiscal year 2020-21 was ₹198 crore and it has a net worth of ₹2,117 crore as on September 30.
The company has five gas-based Ammonia-Urea plants viz. Nangal & Bathinda plants in Punjab, Panipat plant in Haryana and two plants at Vijaipur (district Guna), in Madhya Pradesh. The company currently has a total annual installed capacity of 35.68 LMT of Urea (re-assessed capacity of 32.31 LMT) & is the second-largest producer of Urea in the country with a share of about 15 per cent of total Urea production in the country.
NFL is engaged in manufacturing and marketing of Neem Coated Urea, Bentonite Sulphur, Bio-Fertilizers (solid & liquid), certified seeds and other allied Industrial products like Ammonia, Nitric Acid, Ammonium Nitrate, Sodium Nitrite and Sodium Nitrate. Apart from the manufacturing business, the company is also into the business of imports and trading of various agro-inputs like Non-Urea Fertilizers (i.e. DAP, NPK, MoP etc.), Certified Seeds, Agrochemicals, Bentonite Sulphur, City Compost through its existing Pan India dealers’ network under single window concept.
The government has little over 75 per cent shares in the company. Around, 10 per cent of this holding will be offloaded through OFS. Here, too, employees will be offered shares at a discounted price.
The authorised share capital of the company is ₹800 crore, and the paid-up equity capital is ₹551.69 crore as on March 31, 2020. The company earned net profit of ₹208.15 crore during FY 2019-20. It has a net worth of ₹3,186.27 crore.
The company has two operating units, one at Trombay in Mumbai and the other at Thal, Raigad district, about 100 km from Mumbai. It manufactures Urea, Complex Fertilizers, Bio-fertilizers, Micro-nutrients, 100 per cent water soluble fertilizers, soil conditioners and a wide range of Industrial Chemicals. It produces around 25.00 Lakh MT Urea, 4.75 Lakh MT Complex fertilizers and 4.5 Lakh MT of Industrial Chemicals every year. Besides fertilizer products, RCFL also produces a large number of industrial chemicals that are important for the manufacture of dyes, solvents, leather, pharmaceuticals and a host of other industrial products.