Govt to divest 20% in National Fertilizers Limited

The government will sell 20% of its shareholding in National Fertilizers Limited through an offer for sale for which it has sought bids from merchant bankers and legal advisers.

"The GoI intends to disinvest 20% paid up equity capital of NFL out of its shareholding of 74.71%, through 'Offer for Sale' (OFS) method of shares by promoters through the stock exchanges' as per Securities and Exchange Board of India (SEBI) Rule and Regulations," the department of investment and public asset management (DIPAM) said in a notification Wednesday.

The deadline for merchant bankers and legal advisors to submit their bids has been kept at March 2, 3 pm. Indian government presently holds 74.71% stake in the country’s second largest urea producing company with a share of about 15% of total Urea production in the country.

The offer for sale could fetch the government about Rs 400 crore.

The government said in the document seeking bids that it was also considering allotting shares to eligible and willing employees of NFL at a discount on the issue or discovered price up to a maximum of certain percentage of the OFS size subsequent to completion of the transaction under OFS.

"The percentage and extent shall be decided in due course," DIPAM said.

NFL has an authorised capital of Rs 1,000 crore and a paid-up capital of Rs 490.58 crore. While the government holds 74.71%, 25.29% is held by financial institutions and others. The company reported a net profit of Rs 198 crore for the first six months of the ongoing financial year. As of September 2020, the company had a net worth of Rs 2,117 crore.

NFL has five gas based ammonia-urea plants including Nangal and Bathinda plants in Punjab, Panipat plant in Haryana and two plants at Vijaipur, Madhya Pradesh. The company currently has a total annual installed capacity of 35.68 LMT of Urea (re-assessed capacity of 32.31 LMT).