RCF to seek investment board approval to invest Rs 4,112 cr

With new urea policy getting delayed, state-owned RCF plans to seek clearance from Public Investment Board (PIB) for proposed expansion of its plant in Maharashtra at an investment of Rs 4,112.50 crore.

In March last year, in a meeting of pre-Public Investment Board, the proposal to expand its urea capacity by 1.27 million tonnes at Thal plant was cleared. Following which the RCF applied with the same project under the new urea investment policy, which assures guaranteed buyback.

However, the policy has not been implemented so far as the ministry is contemplating amendments to the policy. "We are still hopeful that government will come up with the urea investment policy and this project will be covered under it. But at present we are planning to seek PIB clearance for the project," a sources said.

The Mumbai-based PSU produces various grades of complex fertilisers at its two manufacturing units in Thal and Trombay in Maharashtra. RCF, along with Coal India , GAIL and Fertiliser Corporation of India (FCIL), has also formed a consortium to revive the sick unit of FCIL at Talcher at a cost of Rs 8,000 crore to manufacture urea and ammonium nitrate via coal gasification.

The proposed unit at Talcher, which is expected to be commissioned by 2017, will manufacture 1.2 million tonnes of urea per annum (mtpa). RCF has reported 28 percent fall in net profit at Rs 52.90 crore for the third quarter ended on December 31, 2013-14. Rashtriya Chem stock price On February 17, 2014, Rashtriya Chemicals and Fertilisers closed at Rs 30.45, up Rs 0.10, or 0.33 percent.

The 52-week high of the share was Rs 52.90 and the 52-week low was Rs 26.00. The company's trailing 12-month (TTM) EPS was at Rs 3.90 per share as per the quarter-ended December 2013. The stock's price-to-earnings (PôE) ratio was 7.81. The latest book value of the company is Rs 42.69 per share. At current value, the price-to-book value of the company is 0.71.