An Attempt To Meet Rising Costs

The Madras Fertiliser issue is devoid of the usual interest shown by the market for any disinvestment programme.

Continuing with its drive of disinvestment in public sector companies, the disinvestment commission has laid down another staid PSU, Madras Fertiliser (MFL), on the offer block. However, the entire exercise appears to be a plaintive ceremony devoid of the usual enthusiasm drummed up by market participants for any disinvestment programme.

There are two major reasons for the same. One, MFL operates in the fertiliser sector, where government policies are dictated by political compulsions than by sound economic logic. The result, markets have always treated fertiliser scrips with a lot of skepticism as is evident by their low discount (average P/E: 5.5). Second, MFL