Under this notification, the companies will get a subsidy only if the production starts in the next five years.
A quick primer on the new Urea Investment Policy which was cleared by the Cabinet Committee on Economic Affairs (CCEA) on Friday. Extracts from a note on the subject by Emkay Global.
The Land Acquisition bill and the urea investment policy have been cleared by the Union cabinet and to know about the market reaction and the expectation Kirti Doshi of Antique Stock Broking spoke to CNBC-TV18.
Fertiliser shares rallied on Friday after the government approved a new policy to encourage investment in urea manufacturing, in a move seen expediting USD 6.5 billion in projects that have been held back.
Suresh Krishnan, MD of Zuari Industries spoke to CNBC-TV18 regarding the urea investment policy and how the issue of gas supply shortage is yet to be resolved
The Cabinet Committee on Economic Affairs (CCEA) today approved a urea investment policy that is likely to incentivise fertiliser firms setting up new plants and expanding existing capacity. India imports over 30 per cent of urea requirement and the policy aims at reducing that. But, it is unlikely to have any impact on existing prices.
Shares of fertiliser companies gained 1-5 percent on Thursday as the Cabinet Committee on Economic Affairs (CCEA) is expected to approve a new urea investment policy today that is likely to incentivise fertiliser firms setting up new plants and expanding existing capacity.
Tarun Surana, Research Analyst (Institutions), Sunidhi Securities & Finance Limited suggests that though the depreciation of the rupee is increasing the costs of production for fertilizer companies, it is still sensible to buy GSFC and Zuhani.
So far we've been hearing the likes of Oil and Natural Gas Corporation (ONGC) and Reliance Industries (RIL) talking about the need to hike gas prices. Now a government panel working on the new urea investment policy is working on the premise of higher gas prices.
The Committee of Secretaries has been working on a new draft for urea investment policy. Saumitra Chaudhuri, member of the Planning Commission indicated that they have been discussing many alternatives for the new urea investment policy currently and it will be rolled out over next four-five years.