Fertiliser stocks surge after govt hikes subsidy; Rashtriya Chemicals, Chambal Fertilisers in fast lane

The price of fertilisers is increasing amid higher prices of raw inputs like phosphoric acid and ammonia, among others. Last year, the actual price of DAP was Rs1,700 per bag, the government said.

May 20, 2021 09:05 IST India Infoline News Service

Shares of fertiliser companies rallied on Thursday after the central government has announced an increase in the subsidy for di-ammonium phosphate fertiliser to Rs1,200 per bag from Rs500 per bag.

The price of fertilisers is increasing amid higher prices of raw inputs like phosphoric acid and ammonia, among others. Last year, the actual price of DAP was Rs1,700 per bag. In which the Central Government was giving a subsidy of Rs500 per bag. So the companies were selling fertilizer to farmers for Rs1200 per bag.

Reacting to this news, the share price of Fertilisers & Chemicals Travancore Ltd (FACT) jumped 6.49%, Rashtriya Chemicals & Fertilizers gained 6.25%, Chambal Fertilisers & Chemicals soared 4.44%, Deepak Fertilisers & Petrochemicals Corporation also climbed 4.46%, Khaitan Chemical also soared 4% and Gujarat Narmada Valley Fertilizers was up by 1.99% on the BSE.

Also, the Central Government spends about Rs80,000cr on subsidies for chemical fertilisers every year. With the increase in subsidy in DAP, the Government of India will spend an additional Rs14,775cr as subsidy in Kharif season.

Meanwhile, benchmark indices have erased early opening bell gains on Thursday and were trading on a bearish note following weak global cues.

The Sensex was trading at 49,943 up by 40 points, while Nifty 50 was performing at 15,015 by down 15 points.

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