Madras Fertilizers was perpendicularly boosted by the government's launching the disinvestment process in the company.

The invitation of bids for a stake in the company by the government on Tuesday set off buying in Madras Fertilizers Wednesday, as the scrip rocketed to its 52-week high of Rs 21.75.

But by 10:30 IST, some gains were whittled down and the scrip was trading at Rs 20.85, still above its yesterday's close by 5.57%. Substantial volumes of over 2.57 lakh shares were recorded on the Madras Fertilizers (MFL) counter on NSE today. Yesterday, the scrip had climbed 10% to Rs 19.75 by close. The scrip has now risen 196%, over two months, from a 52-week low of Rs 7 on NSE.

The government has invited initial bids for a controlling 33.5% stake in MFL. ICICI Securities has been appointed as the advisor in the privatisation process.

Earlier (on 27 May 2003), the company announced that the Government of India (GOI) and joint promoter National Iranian Oil Company (NOIC) had signed an agreement to jointly divest their holdings in MFL. NOIC had agreed to divest its 25.77% stake along with the Government of India when the latter puts its 33.50% holding on the block. As of now, the government holds a 59% stake in Madras Fertilizers (MFL).

In addition, to strengthen the bidding process for MFL, the government has allowed all PSU and government controlled co-operatives to participate in the privatisation process.

Incorporated in the year 1966, the Chennai based PSU, MFL, is in the business of manufacturing fertilsers such as ammonia, urea, NPK, biofertilizers and pesticides. Apart from this, the company also trades in potash and agrochemicals.

The company's plant at Manali, Chennai has the capacity to produce 346500 MT of ammonia, 486750 MT of urea, 840000 MT of NPK and 400 MT of biofertilisers. It also has plants in other southern Indian states like Andhra Pradesh and Karnataka.

For the third quarter ended 31 December 2002, MFL recorded a net loss of Rs 5.09 crore compared to a net loss of Rs 16 crore in the corresponding period of the previous year. Net sales increased by 4.4% to Rs 260.41 crore from Rs 249.48 crore in DQ 2001.