Nutrient-based subsidy for urea a positive step: ICRA
ICRA has come out with its report on nutrient-based subsidy (NBS). As per the research firm NBS mechanism for urea is a positive step towards market-linked farm gate pricing, but impact likely to be neutral for the credit profile of gas-based urea manufacturers.
August 11, 2011 / 15:39 IST
ICRA has come out with its report on nutrient-based subsidy (NBS). As per the research firm NBS mechanism for urea is a positive step towards market-linked farm gate pricing, but impact likely to be neutral for the credit profile of gas-based urea manufacturers.
ICRA sees the phased price decontrol of urea and the introduction of a nutrient-based subsidy (NBS) mechanism as a positive step towards market-linked farm gate pricing. The mechanism would also establish consistency with the policy for NPK fertilisers, thereby promoting balanced nutrient consumption. As for the impact of NBS on the credit profiles of the existing gas-based urea manufacturers, that should be largely neutral; however post-conversion, naphtha/FO/LSHS based players could be at a slight disadvantage against the existing gas based players because of their higher energy consumption.According to Mr. K. Ravichandran, Senior Vice-President and Co-Head, Corporate Ratings, ICRA,
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