Govt invites new merchant bankers, transaction advisors for RCF, NFL OFS

As fertiliser sector moves towards greater reliance on nano urea, market interest towards these PSUs is likely to improve

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26 Aug, 2025 12:21

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The Finance Ministry's Department of Investment and Public Asset Management (DIPAM) has invited fresh bids to appoint merchant bankers and transaction advisors for managing the stake sale in Rashtriya Chemicals and Fertilizers (RCF) and National Fertilizers Ltd (NFL), sources said. The move signals a renewed push by the government to revive the long-pending divestment of its holdings in the two fertiliser public sector undertakings (PSUs), a plan that has been awaiting execution for over eight years despite Cabinet approval.

"The plan to offload stakes in RCF and NFL has been pending for eight years. DIPAM has to do it as it is the decision of the Cabinet," a senior government official told Moneycontrol. The Cabinet had earlier approved disinvestment of a 20 percent stake in National Fertilizers Ltd (NFL) and a 10 percent stake in Rashtriya Chemicals and Fertilizers Ltd (RCF). Put together, the two stakes are said to be worth approximately Rs 1,200 crore.

According to a source aware of the development, the latest move comes after the tenure of previously appointed merchant bankers and transaction advisors came to an end without extension. "DIPAM has invited the appointment of new merchant bankers and transaction advisors for offloading stake in RCF and NFL. The term of previous merchant bankers and transaction advisors has not been extended and their term has come to an end. So DIPAM has invited fresh bids. After the appointment during this fiscal, within a month, if the government wants, they can bring out the OFS in the two fertiliser PSUs depending on market conditions," the source told Moneycontrol.

DIPAM's fresh appointments could finally pave the way for the Offer for Sale (OFS) in these two companies. However, the timing of the stake sale will depend on investor appetite and broader market conditions, which have so far kept the transaction on the back burner. Previously the transaction advisors for RCF were Kotak Investment Banking and IDBI Capital. For NFL, BOB Capital Markets Ltd and IDBI Capital were the advisors.

Earlier attempts to offload the government's stake in these fertiliser PSUs faced delays due to lack of investor interest, as reported by Moneycontrol in August 2023. As the fertiliser sector moves towards greater reliance on nano urea, which is not regulated, the market interest towards these PSUs is likely to improve, another government official had earlier said.