Deepak Fertilizers buzzing on release of subsidy payment by GoI

Deepak Fertilisers & Petrochemicals Corporation gained handsomely on Tuesday and is trading at Rs. 165 per share, up by almost 6.5 per cent or Rs. 10 per share. The stock gained as the company announced that the Ministry of Chemicals and Fertilisers has agreed to release Rs. 485 crore outstanding subsidy payment. 

Deepak Fertilisers had to knock the doors of Bombay High Court as the Department of Fertilisers (DoF), Ministry of Chemicals and Fertilisers had been withholding subsidy claims due to the company. DoF under the applicable Nutrient Based Subsidy (NBS) scheme of the Government of India has withheld a total subsidy of Rs. 795 crore for the company. Out of these Rs. 795 crore only Rs. 485 crores is being released and Rs. 310 crores is yet to be released. 

The NBS scheme adopted by GoI since 2010 is for 22 grades of decontrolled fertilisers namely DAP, MAP, TSP, DAP Lite, MOP, SSP, Ammonium Sulphate and 15 grades of complex fertilisers. These fertilisers are provided to the farmers at the subsidised rates based on the nutrients (N, P, K & S) contained in these fertilisers.

The stock has outperformed the broader market by generating almost 41 per cent over a 1 year period. The stock made an intra-day high at Rs. 167 per share and is trading close to its 52 w high at Rs. 173 per share. 

Broader market is trading flat to negative  with Sensex  trading at 26367 levels on an intra-day basis, down by almost 28 points.