Fertiliser stocks jump 3-14% on cabinet nod for gas pooling

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26 Aug, 2025 12:21

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Moneycontrol Bureau

Investors lapped up shares of fertiliser companies on Wednesday after the Union Cabinet yesterday approved gas pooling for 30 urea manufacturing units in the country. Fertiliser stocks rallied 3-14 percent intraday today.

The move would allow sale of gas at a composite price arrived at by pooling gas from cheaper domestic and more expensive imported sources.

Communications minister Ravi Shankar Prasad also announced the government would set up a 2000 km gas pipeline between Haldia (West Bengal) and Jagdishpur (Uttar Pradesh) at a cost of Rs 10,000 crore. Fertilizer plants in Gorakhpur (UP) and Barauni (Bihar) would be revived and connected to the above pipeline, he added.

Welcoming the decision, Kapil Mehan, MD & Group CEO, Zuari Agro Chemicals said this would be a very positive step for the industry as a whole and specifically for the nitrogenous industry.

The move will not only help reduce the working capital but will also pave the way for further reforms in terms of pricing, nutrient based subsidy etc., Mehan said.

According to him, the cost of gas is likely to go down to USD 11-12 per mmBtu (million metric British thermal units). The company currently operates at a cost of USD 20 per mmBtu.

Edelweiss said Chambal Fertilisers and Zuari Agro would be beneficiaries of this move. The brokerage advises holding Chambal with a target of Rs 70 apiece and buying Zuari with a target of Rs 398.

 Posted by Sunil Shankar Matkar