Iffco to bid for 51% NFL stake

Indian Farmers Fertilisers Cooperative Ltd (Iffco) has decided to aggressively bid for picking up 51 per cent equity in National Fertilisers...

Indian Farmers Fertilisers Cooperative Ltd (Iffco) has decided to aggressively bid for picking up 51 per cent equity in National Fertilisers Limited (NFL) which is on the disinvestment list of the government.

The fertiliser major on Friday submitted expression of interest (EoI) to Rabo Finance India, the financial advisor appointed by the government to coordinate NFL sale. “We are interested in NFL. Iffco officials have already completed the technical assessment of the PSU. We have submitted the EoI well before the deadline of February 12 fixed by the government,” managing director of Iffco U.S. Awasthi said.

“We are a serious bidder and fulfil the eligibility criteria of net worth fixed by the disinvestment ministry,” Awasthi said. The cooperative has a net worth of Rs 3,393 crore and can raise enough resources from the market, Awasthi said.

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“Iffco wanted to place bids three years ago but could not do so because cooperatives were not allowed to bid for PSUs. However, with the government lifting the ban, we decided to bid for NFL,” he said.

The government is expected to sign the memorandum of understanding with qualified bidders for NFL sale during the current fiscal. The actual sale, however, will take much longer. After signing of MoUs, government will invite pre-qualification bids to be followed by price bids. The exercise is most likely to be completed in eight months.

Besides Iffco, other interested bidders are Tata Chemicals, Chambal Fertilisers and Chemicals, Indo-Gulf, Oswal Chemicals and Krishak Bharati Cooperative (Kribhco).

According to industry sources, NFL is lucrative for companies because it will provide access to the highest urea consuming markets such as Madhya Pradesh, Punjab and Haryana. NFL is the only fertiliser company with plants in all these three key states.

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The government is likely to mop up Rs 1,000 crore with NFL’s disinvestment. The company would gain Rs 400 crore in the seventh and eighth pricing period, the sources added.