NFL to pick 18% stake for Rs 572 cr in JV to set up urea plant in Assam

State-owned National Fertilizers Ltd (NFL) will pick up an 18 per cent stake for about Rs 572 crore in a proposed joint venture to establish a urea plant in Assam.

In a regulatory filing on Friday, NFL informed that its board has given "consent to enter into Joint Venture Agreement with other nominated companies to form a Joint Venture company for setting up of a new Ammonia-Urea Complex Namrup-IV Fertilizer Plant at Namrup, Assam".

NFL will have an 18 per cent stake in the joint venture, which is being incorporated. The cost of acquisition of the 18 per cent shareholding is estimated at Rs 572.45 crore, the filing said.

Last month, the Union Cabinet approved the proposal for setting up of a new Brownfield Ammonia-Urea Complex of 12.7 lakh tonnes annual capacity of urea production within the existing premises of Brahmaputra Valley Fertilizer Corporation Ltd (BVFCL), Namrup Assam, with an estimated total project cost of Rs 10,601.40 crore with debt equity ratio of 70:30 through a joint venture (JV).

The tentative overall time schedule for the commissioning of the Namrup-IV Project is 48 months.

In the proposed JV, The Assam government will have 40 per cent stake, BVFCL  11 per cent, Hindustan Urvarak & Rasayan Limited (HURL) 13 per cent, NFL 18 per cent and Oil India Limited (OIL) 18 per cent. BVFCL's share of equity will be in lieu of tangible assets.

The project will increase the domestic urea production capacity in the country, especially in the north-eastern region. It will meet the growing demand of urea of the north-east, Bihar, West Bengal, Eastern Uttar Pradesh, and Jharkhand.