KOCHI: Buoyed by the turnaround in its operations, the public sector Fertilisers And Chemicals Travancore Ltd (FACT) has urged the government to consider a dilution of stake through a follow-on public issue.
The stock price of FACT has shot up from around Rs 42/share in January 2019 to Rs 475/share on Friday, a rise of 1,030% just over four years. "We have told the government of India that if it disinvests 15-20% share, it will get Rs 4,000-5000 crore. That proposal is under consideration of the Department of Public Enterprises," said Kishor Rungta, chairman and managing director of FACT.
The earlier proposal was full strategic sale of the fertiliser PSU to another company. "Strategic disinvestment of a minority stake is a better proposition. Ultimately, the government is the owner, and the decision is theirs," he said. The central government owns 90% stake in FACT while the remaining 10% is with public and government-owned institutions.
The Udyogamandal, Kochi-based company, which had been reporting losses for a long period till 2017-18, made a net profit of Rs 163.14 crore in 2018-19, and has been reporting consistent growth over the last four years. Total revenue and earning for FACT for the year ended March 2023 stood at Rs 6333.73 crore and Rs 612.99 crore on a consolidated basis. The company has also applied for getting a Miniratna status from the central government, he said.
In the last four years, the growth of the company's turnover year-on-year is 25-30%, Rungta said. According to him, all accumulated losses have been wiped out. He said FACT, which is expanding its capacity from 10 lakh tonnes to 15 lakh tonnes in June-July 2024, will report a turnover in excess of Rs 8,000 crore in the 2024-25 financial year. "In 2023-24, our target is to match last year's Rs 6,000-plus turnover," he said.
Before 2018, he said FACT's production was in the range of 7.5-8 lakh tonnes. "From 2019, our production is 1 million tonnes (10 lakh tonnes). In the last four years, the production has been more than 10 lakh tonnes. We also started importing fertilisers. And we started trading. That also gave us a good margin. In 2018-19, we imported 1.70 lakh tonnes of MOP or muriate of potash," Rungta said.
On the company's expansion plans, he said the new plant, which will have a capacity of 5 lakh tonnes per annum, at Ambalamedu will produce different grades of fertilisers. FACT is investing Rs 630 crore for the expansion and it will be commissioned by June-July 2024. Along with the plant, FACT is also building new infrastructure facilities, like an ammonia tank, phosphoric tank, sulphuric acid tank and a new barge. "When we are producing an extra 5 lakh tonnes, we have to have so much extra raw material. Work is going at a fast pace," he said.