Target: ₹3,250
CMP: ₹2,897.20
SRF hosted a call, represented by Prashant Yadav, President and CEO – Fluorochemicals Business, to elaborate on the regulatory landscape of refrigerant gases. Yadav briefly explained the 2016 Kigali Amendment of the 1987 Montreal Protocol and related baseline determination periods, years of freeze of quota, and phase out schedules for different countries.
Key takeaways: US and China have completed their baseline periods and their quotas are in the freeze years, while India is undergoing its baseline determination period and framing related policies; For market participants, import + domestic sales will be consumption quota, and production + exports will be production quota.; The formula for calculation of GWP allowance for Article A5 countries (China, India) is HFC + 65 per cent of the HCFC baseline; however, US and China have not yet touched their HCFC baseline allocation; Eligibility for quota allocation in China was based on plants commissioned before the start of baseline period (Dec-19); Hence, Indian players setting up a plant during the baseline period will receive pro-rated quota allocation, although whether the government allocates HCFC quota to plants that could enable it to sell full capacities is yet to be seen; and No new HFC plant can be commissioned post Dec-26.