Government's deferment on urea decontrol hits fertiliser shares

MUMBAI: The fertiliser stocks got hammered today morning, with some of them shedding as much as over six per cent on BSE, as the government deferred its decision to decontrol urea prices.

Disappointed by the delay on deregulation of urea prices, Chambal Fertilisers & Chemicals witnessed a decline of 6.68 per cent at Rs 80.95 a share in the morning trade.

Yesterday, a Group of Ministers (GoM) headed by the Finance Minister Pranab Mukherjee, decided to refer the issue of decontrolling urea, which constitutes half of India's total fertiliser consumption, to a committee of secretaries.

Reacting to the news, shares of another company National Fertlizers tanked by 5.98 per cent to Rs 110 a piece on Bombay Stock Exchange.

Other major losers in the fertiliser pack included Nagarjuna Fertilizers and Chemicals (down 5.07 per cent), Rashtriya Chemicals & Fertilizers (down 3.58 per cent) and GSFC (1.36 per cent).

The government had introduced the nutrient-based subsidy (NBS) scheme in April 2010 decontrolling potassic and phosphatic fertilisers, but kept its control on price and movement of urea-based fertilisers.

Meanwhile, the 30-share benchmark Sensex was trading at 20,217.19 at 1059 hours, down by 83.91 points from its previous close.