Stepping up the disinvestment process of National Fertilisers Ltd (NFL), the government has decided to go in for a special dividend of 80-100 per cent (Rs 8-10 per share) to be paid by the company before its privatisation. This would make the government, owner of 97.64 per cent stake in the company, richer by Rs 400-500 crore. NFL, a category-I mini ratna (jewel) public sector company, will become the third company after Videsh Sanchar Nigam Ltd (VSNL) and BALCO whose reserves are being partially encashed by the government before privatisation. Interestingly, both VSNL and BALCO fetched attractive valuations in their privatisation even after giving money to the government from their reserves. NFL’s due diligence was completed recently and the government is expected to call for financial bids soon for the sale of its 51 per cent shareholding in the company to a strategic partner. The government expects NFL’s strong financial performance in 2002-03 (highest ever profit before tax of Rs 448.79 crore as against Rs 48.33 crore in 2001-02) and its inherent strength in the fertiliser industry to fetch an attractive price for its shares in the disinvestment. The bidders for NFL are Tata Chemicals, KK Birla Group’s Zuari-Chambal, Aditya Birla group’s Indo-Gulf Corporation and co-operative sector IFFCO. NFL has reserves of around Rs 1,000 crore. The company posted a nearly 650 per cent increase in profit after tax to Rs 294.51 crore during the year-ended March 2003 as against Rs 40.61 crore in 2001-02, boosting its earnings per share to Rs 6 in 2002-03 from Rs 0.83 in 2001-02 on a paid up capital of Rs 490.57 crore. The company reported net sales of Rs 3,651.74 crore in 2002-03 as compared to Rs 2,943.13 crore in 2001-02. The capacity utilisation improved to 99.40 per cent from 98.80 per cent. NFL’s net worth was Rs 1,080.43 crore as on March 31, 2002. As on March 31, 2003, the balance 2.36 per cent shares of NFL were held by mutual funds and Unit Trust of India (0.25 per cent), banks, financial institutions and insurance companies (1.84 per cent) and public (0.27 per cent). NFL is one of the largest producers of nitrogenous fertilisers in the country with an installed capacity of 35.49 lakh metric tonne. It had a market share of 13.70 per cent, just 1.20 per cent less than the market leader IFFCO, during 2001-02. The company has two manufacturing units in Punjab and one each in Haryana and Madhya Pradesh. In 2002-03, NFL accounted for 17.15 per cent of the total urea produced in India as against 16.64 per cent in 2001-02. Besides fertiliser, NFL also produces industrial products such as methanol, nitric acid dilute, ammonium nitrate, sulphur, industrial grade urea, liquid oxygen, liquid nitrogen, carbon slurry, carbon dioxide gas, sodium nitrate, and off-grade methanol.
