Fertilizer stocks soared on media reports that the government, for the first time, had issued fertilizer bonds worth Rs 7,500 crore to part-finance the additional subsidy burden on the fertilizer companies due to rising price of imported feedstock and fertilizer.
As per reports, these bonds will be freely tradable in the market. The move came as the recoveries made by the government were not enough to pay for the additional subsidy.
The issue of fertilizer bonds was included in the supplementary Budget for 2007-08, under which the government sanctioned Rs 15,000 crore for the fertilizer ministry, comprising the bonds, Rs 6,550 crore as net cash outgo and Rs 950 crore as recoveries under crop husbandry.
At 15:00 IST, Chambal Fertilisers & Chemicals had moved up 19.39% to Rs 44.75, Coromandel Fertilisers was up 12.14% to Rs 94.60, Gujarat State Fertilisers & Chemicals up 13.03% to Rs 228, Mangalore Chemicals & Fertilisers was up 9.98% to Rs 29.75, National Fertilizers was up 13.54% to Rs 36, Rashtriya Chemicals & Fertilisers moved up 16.57% to Rs 52 and Tata Chemicals went up 7.33% to Rs 251.