Madras Fertilizers surged for the third day in a row today on divestment hopes.

The scrip of the state-backed fertiliser major was locked at the 10% upper limit of Rs 19.60 on BSE today . There was an outstanding buy position for 76,622 shares on the counter . Today was the third day running that the stock surged to its upper band.

A thinly traded stock, MFL has jumped sharply over the last few trading sessions. The stock has now climbed to its current level from Rs 8.10 on 13 May 2003.

The latest surge on the counter comes on the just announced disinvestment initiative. MFL announced on Thursday that the Government of India (GOI) and the other promoter National Iranian Oil Company (NOIC) have agreed to together offload a combined holding of 59.27% in MFL by way of a strategic sale. The 59.27% stake includes the entire holding of 25.77% of NOIC and the 33.5% stake of the government.

The government has identified MFL for disinvestment and it proposes to bring down its stake in the company from the current 59.5% to 26%. Earlier, there were reports that the GoI had allowed all state-run and government controlled co-operatives to participate in the disinvestment of state-run fertiliser companies.

The  Chennai-based MFL manufactures ammonia, urea and NPK  and has related offsite bagging and shipping facilities. Apart from this, the company also trades in potash and agro-chemicals. The company's plant at Manali has a capacity to produce 3,46,500 MT of ammonia, 4,86,750 MT of urea, 8,40,000 MT of NPK and 400 MT of bio-fertilisers.

For the third quarter ended 31 December 2002, MFL reduced losses to Rs 5.09 crore compared to losses 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.