National Fertilizers Ltd. (NFL) led Indian urea producers higher in Mumbai after the government approved a policy to increase investment in the nitrogen-based fertilizer.
National Fertilizers, the nation’s biggest listed producer, rose as much as 6 percent to 81.35 rupees and was set for the biggest gain in six weeks. Rashtriya Chemicals & Fertilizers Ltd. (RCF) rose as much as 5.4 percent to 57.50 rupees, while Coromandel International Ltd. (CRIN) increased 2 percent. The Fertilisers & Chemicals Travancore Ltd. (FCT) jumped by its 20 percent limit to 33.20 rupees, the most since Jan. 7.
India approved a urea investment policy that will help build new capacities and lower import dependence, Food Minister K.V. Thomas said yesterday in New Delhi. The policy, which will save 47.6 billion rupees ($873 million) of government subsidy, will guarantee at least a 12 percent rate of return and a maximum 20 percent profit margin for factories set up in the next five years.
The minimum and maximum price of natural gas, the main feedstock used to make urea, has been set at $6.5 per million British thermal units of energy equivalent and $14 per MMBtu respectively, according to the new policy.
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