RCF was burdened by the heavy losses it recorded for FY 2002-03, plummeting 9.54% to Rs 22.75

By 10:25 IST, the scrip of the state-run fertiliser maker recorded quite substantial volumes of nearly 2 lakh shares on BSE.

For the year ended 31 March 2003, RCF recorded losses of Rs 48.07 crore compared to a net profit of Rs 24.21 crore in the previous year. Total income increased marginally by 0.41% to Rs 2,072.43 crore from Rs 2,063.85 crore.

For Q4 ended 31 March 2003, the company's performance was redeeming with a 146% rise in net profit to Rs 59.19 crore (24.04 crore) on a 13% increase in total income to Rs 650.66 crore (Rs 576.66 crore).

The scrip's fall today is believed to be in knee-jerk reaction to the annual results. The stock is therefore expected to recover after a small correction.

In the last month-and-a- half, RCF's fortunes have been commendable, rising 95% to Rs 25.15 from Rs 12.90. This rally was set off by the government's plan to disinvest 51% stake in the state-run fertiliser major as well as on hopes that the company may record growth in 2002-03. Currently, the government holds 92.5% stake in RCF.

There have been reports earlier that Tata group company Tata Chemicals and Aditya Birla group company Indo Gulf Fertilizers would be submitting expressions of interest (EOIs) to acquire the government's 51% stake in the company. The company's are eyeing RCF's huge manufacturing capacity and real estate assets, it is believed. EOIs for the 51% stake will likely be invited shortly.

RCF is the largest gas-based fertiliser and chemicals manufacturer in the country, with an installed capacity of 1.16 million tonnes. It has manufacturing units at Thal (Raigad district in Maharashtra) and Trombay near Mumbai. The company produces nitrogenous, phosphatic, and potash fertilisers along with a wide range of industrial chemicals. Fertilisers contribute 80% of its turnover. Since it has a depreciated plant, the cost of producing urea is low compared to international companies.

Other properties of RCF include housing complexes in Mumbai and Thal. It has an 800-acre property in Mumbai alone.

RCF has embarked upon an ambitious investment plan involving Rs 2,700 crore over the next three to five years for modernisation of its Trombay and Thal plants. The plan is to make the units safer and more environment-friendly. The company, which proposes to achieve a turnover of Rs 5,000 crore to take on global competition in the wake of WTO regime, will fund these schemes through internal accruals without government of India support.