National Fertilizers Ltd (NFL), a state-owned company, will acquire an 18% stake in a proposed joint venture to establish a urea plant in Assam for approximately Rs 572 crore.
In a regulatory filing on Friday, NFL stated that its board has given "consent to enter into Joint Venture Agreement with other nominated companies to form a Joint Venture company for the establishment of a new Ammonia-Urea Complex Namrup-IV Fertilizer Plant at Namrup, Assam."
The NFL will own an 18% stake in the joint venture that is being formed. The cost of acquiring the 18% shareholding is estimated to be Rs 572.45 crore, according to the filing.
Last month, the Union Cabinet approved a proposal to establish a new Brownfield Ammonia-Urea Complex with an annual urea production capacity of 12.7 lakh tonnes within the existing premises of Brahmaputra Valley Fertilizer Corporation Ltd (BVFCL), Namrup, Assam, at a total project cost of Rs 10,601.40 crore and a debt-equity ratio of 70:30 through a joint venture.
The Namrup-IV Project's commissioning is expected to take 48 months.
In the proposed JV, the Assam government will have 40% stake, while BVFCL 11%, Hindustan Urvarak & Rasayan Limited (HURL) 13%, NFL 18%, and Oil India Limited (OIL 18%). BVFCL's equity stake will be in lieu of tangible assets.
The project will boost domestic urea production capacity in the country, particularly in the north-east region. It will meet the increasing demand for urea in the northeast, Bihar, West Bengal, Eastern Uttar Pradesh, and Jharkhand.
