Govt to divest 12.5% stake in Rashtriya Chemicals via OFS route on Friday
EGom has decided to sell 12.5 per cent stake sale in Rashtriya Chemicals and Fertilisers (RCF) via OFS route on Friday, March 8.
By Ramkrishna Kashelkar, ET Bureau |
Government has fixed Friday, 8th March 2013 for divesting 12.5 per cent stake in Rashtriya Chemicals & Fertilisers (RCF) through an 'Offer for Sale' or OFS mechanism. The scrip ended 0.7 per cent up at Rs 44.6 in response to the news.
The government currently owns 92.5 per cent stake in the fertiliser major, which will come down to 80 per cent post the OFS, and raise around Rs 300 crore for the government.
RCF recently got a preliminary approval for setting up additional 1.27 million tonne per annum urea unit at Thal for a capital expenditure of Rs 4112 crore. The project still awaits approvals from Public Investment Board (PIB) and Cabinet Committee on Economic Affairs (CCEA).
Recently the company completed debottlenecking at its existing units at Thal at a cost of Rs 489 crore to raise capacity to 2 million tonne from 1.7 million tonne earlier. The company will be able to reap benefits under the Import Parity Price (IPP) based pricing mechanism for the extra production in the current fiscal.
In two other major projects the company is trying to revive a mothballed urea unit at Talcher in a joint venture with Coal India. It expects the cost of production there will be lower since it will use coal as feedstock. Similarly, it is planning to set up a gas-based urea facility in Ghana.
The company is also about to receive Transfer of Development Rights (TDRs) worth around Rs 130 - 150 crore for the land taken by MMRDA for completion of Eastern Freeway Project.
The RCF scrip has consistently under-performed the overall markets in the past one year. It lost over 30 per cent of its valuation in last 12 months when the BSE Sensex has gained over 11 per cent. This was notwithstanding the fact that its earnings grew 19.4 per cent during the past 12 months to Rs 276.9 crore. The company is valued at 8.9 times its earnings for trailing twelve months.
The government currently owns 92.5 per cent stake in the fertiliser major, which will come down to 80 per cent post the OFS, and raise around Rs 300 crore for the government.
RCF recently got a preliminary approval for setting up additional 1.27 million tonne per annum urea unit at Thal for a capital expenditure of Rs 4112 crore. The project still awaits approvals from Public Investment Board (PIB) and Cabinet Committee on Economic Affairs (CCEA).
Recently the company completed debottlenecking at its existing units at Thal at a cost of Rs 489 crore to raise capacity to 2 million tonne from 1.7 million tonne earlier. The company will be able to reap benefits under the Import Parity Price (IPP) based pricing mechanism for the extra production in the current fiscal.
In two other major projects the company is trying to revive a mothballed urea unit at Talcher in a joint venture with Coal India. It expects the cost of production there will be lower since it will use coal as feedstock. Similarly, it is planning to set up a gas-based urea facility in Ghana.
The company is also about to receive Transfer of Development Rights (TDRs) worth around Rs 130 - 150 crore for the land taken by MMRDA for completion of Eastern Freeway Project.
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The RCF scrip has consistently under-performed the overall markets in the past one year. It lost over 30 per cent of its valuation in last 12 months when the BSE Sensex has gained over 11 per cent. This was notwithstanding the fact that its earnings grew 19.4 per cent during the past 12 months to Rs 276.9 crore. The company is valued at 8.9 times its earnings for trailing twelve months.
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