Explained — Why fertiliser stocks Chambal, RCF, FACT, Deepak surged up to 11% on Tuesday

About this update from Rashtriya Chemicals & Fertilizers Ltd.

India's fertiliser companies, Chambal Fertilisers Ltd., RCF Ltd., Deepak Fertilisers Ltd., FACT Ltd., gained as much as 11% on Tuesday, March 10, after the government issued the Natural Gas Regulation Order, 2026. As per the order, the Natural Gas supply to fertilizer plants, will be capped at 70% of the last six-month average. The order also goes on to state that the units will not use the gas supplied to them for any other purpose, other than the production of fertilisers. Supply of Natural Gas is important for fertilizer companies as majority of that is consumed as feed stock, used in the production of Ammonia, a primary input for the production of Urea. Additionally, the gas is also used to generate extreme heat and high-pressure scheme needed for the chemical reactions used in the production process. Supply of Natural Gas has been disrupted across the world, including India, as Qatar Energy, one of the largest gas producers, declared a force majeure, prompting a downward chain reaction among its clients as well. Qatar Energy was forced to declare the force majeure as drone attacks from Iran during the ongoing war in West Asia has caused damage to its infrastructure. Shares of FACT are trading 11.4% higher on Tuesday at ₹736.7. The stock is the second-best performer on the Nifty 500 index. However, it must be noted that the stock has negligible free float, as the government has 90% stake. Shares of RCF and Chambal Fertilisers have surged 6.6% and 5.7% respectively.

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