Rashtriya Chemicals Approves Raising Up To Rs 1,400 Crore Via NCDs

Rashtriya Chemicals & Fertilizers (RCF) has just announced raising up to Rs.1,400 crore by issuing non-convertible debentures (NCDs) through a private placement. The plan is to roll out these NCDs in one or more segments over the next year, but it’s all pending shareholder approval at their upcoming Annual General Meeting (AGM).

What’s the Plan?

RCF’s board has approved issuing these NCDs in both secured and unsecured forms. The idea is to gather up to Rs.1,400 crore to strengthen the company’s financials. The board meeting isn’t over yet, though; it’ll continue on Friday to iron out the remaining details. Also, the trading window will be closed until September 8, giving investors a bit of time to digest the news.

Financial Snapshot

RCF, known for its position in producing and selling fertilizers and industrial chemicals, recently saw its consolidated net profit drop a steep 84.04% to Rs.10.80 crore for Q1 FY25. That’s a significant drop from Rs.67.69 crore in the same quarter last year. On a brighter note, the company’s revenue from operations grew by 8.73% year-on-year, hitting Rs.4,396.06 crore for Q1FY25. As of June 30, 2024, the Government of India holds a major 75% stake in RCF, which adds a layer of stability to the company’s operations.

How’s the Stock Doing?

In reaction to the NCD announcement, RCF’s share price dipped 2.5% to Rs.194.09 on the BSE. But looking at the bigger picture, the stock has surged by 48% over the past year, despite the recent profit slump. 

Conclusion: Wrapping It Up, RCF raising Rs.1,400 crore through NCDs is a step to secure its financial future. While recent profit figures are down, the company’s revenue growth and government backing point to a focus on long-term stability. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.