Shares of fertiliser companies surged as much as 4% on the BSE today on the government's move to cut subsidy on certain decontrolled fertilisers for the next fiscal.
National Fertilisers, Rashtriya Chemicals and Fertilisers (RCF) and Coromandel Intermational saw their share prices rise by 3-4% in early afternoon trade on the BSE in an overall weak market.
The Cabinet Committee on Economic Affairs (CCEA) is believed to have approved today the Fertiliser Ministry's proposal to reduce subsidy on P and K fertilisers under the Nutrient Based Subsidy (NBS) policy.
National Fertilisers jumped 4% to Rs 93.70 apiece, RCF gained 3.25% to Rs 68.40 and Coromandel rose by 3.56% to trade at Rs 286.50 a share.
Shiva Global Agro Industries gained 0.29% while Zuari Industries grew by 0.88% up and Deepak Fertilisers & Petrochemicals Corp was up 0.19%,
However, Tata Chemicals were trading 0.29% lower at Rs 361 a piece on the bourse.
Due to strengthening of rupee and bearish global price, the Fertiliser Ministry had recommended reduction in subsidy on nitrogen (N) and potassium (K) at Rs 24 per kg each and Rs 21.8 per kg on phosphate (P) for the 2012-13 fiscal.
These subsidy rates will be made effective from April 1, 2012.