Synopsis: After the Central government gave its approval to new Nutrient-Based Subsidy (NBS) rates for the Rabi 2025-26 season to make fertilizers accessible at reasonable prices to farmers, fertilizer stocks such as FACT, Khaitan Chemicals, and Coromandel International have come under the spotlight.
The shares of leading fertilizer companies are back in focus as the center announced a significant subsidy scheme for this Rabi Season. In this article, we will dive more into the details of it.
About the Announcement
For the Rabi season 2025, the Union Cabinet has approved a fertilizer subsidy of close to Rs 38,000 crores. This is Rs 736 crores more than the amount used for the Kharif season. Despite the increase in the international prices of fertilizers, the main objective remains to make that of making safety of fertilizers like DAP and NPK available to all farmers in India.
The government subsidizes 28 different kinds of fertilizers depending on their nutrient content as per the Nutrient-Based Subsidy (NBS) scheme. The Cabinet, headed by Prime Minister Narendra Modi, has approved the rates of Rs 43.02 per kg for Nitrogen, Rs 47.96 per kg for Phosphorus, Rs 2.38 per kg for Potash, and Rs 2.87 per kg for Sulfur.
Such a decision goes a long way in assuring the farmers that the government is there to shield them from international price shocks and that they will always have access to the nutrients their crops need. This represents a huge 55 percent increase in the subsidy, i.e., agricultural sector support, when compared to the Rabi season 2024-25, subsidy of Rs 24,476 crores.
Fertilizer manufacturers such as Coromandel International, FACT, Chambal Fertilizers, Khaitan Chemicals, Rashtriya Chemicals & Fertilizers, Paradeep Phosphates, etc, are going to be the major beneficiaries of the government’s 55 percent hike in the Rabi season subsidy.
As these companies are involved in the production and distribution of the major P&K fertilizers like DAP and NPK, they may experience enhanced demand and increased sales volumes during the Rabi season. The elevated subsidy is a way of guaranteeing a stable price for farmers, which is the main factor for a steady offtake and good profitability fertilizer producers will enjoy.
Written by Satyajeet Mukherjee
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