 "Fertilisers lose investor enthusiasm as govt defers urea price hike")
Mumbai: Shares of fertiliser companies which rallied by up to 6 percent in the morning trade gave up most of their gains as the government deferred the Fertiliser Ministry’s proposal to hike retail prices of urea by 10 percent for 2012-13 fiscal.
Stocks from the fertilizer counter, which traded on a sanguine note since morning trades on the buzz that government may raise urea price by 10 percent with an aim to cut up to Rs 2,000 crore on the total subsidy outgo on urea, have come off the day’s highs while some have even slipped in to the negative terrain.
[caption id=“attachment_343475” align=“alignleft” width=“380” caption=“The Cabinet Committee on Economic Affairs was to take up a proposal to hike urea prices by Rs 500 a tonne as part of a series of steps to cut subsidies in the face of an economic slowdown. Reuters”]
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National Fertilisers, which gained nearly 6 percent in morning session pared most of the gains and was trading 0.67 percent up at Rs 83.20 on the BSE in afternoon trade.
Rashtriya Chemicals & Fertilizers also trimmed its initial gains and was quoting 0.60 percent higher, while Coromandel International was trading 0.42 percent up. Among others, Chambal Fertilisers & Chemicals slipped 0.59 percent after gaining over 4 percent in the morning trade.
The government today deferred the Fertiliser Ministry’s proposal to hike retail prices of urea by 10 percent to Rs 5,841 per tonne for the 2012-13 fiscal.
Urea is the only fertiliser that remains under full price control. Its current retail price is Rs 5,310 per tonne. The proposal to hike urea prices was made to redress imbalanced use of soil nutrient and reduce the subsidy burden of the government. Meanwhile, the BSE benchmark Sensex was trading 78.83 points lower at 16,801.68 at 1335 hrs.
PTI