Fertiliser stocks such as FACT, Chambal Fertilisers and Coromandel International surged up to 6% after reports suggested the government may significantly increase subsidies in FY27. Investor sentiment was buoyed by expectations of higher support amid rising global fertiliser prices and supply-chain disruptions stemming from tensions in West Asia.
The rally came after media reports indicated that the Ministry of Fertilisers has approached the Finance Ministry seeking a sharp increase in the subsidy outlay for FY27. According to the reports, the ministry has proposed doubling the fertiliser subsidy allocation to ₹1.71 lakh crore, citing growing concerns over escalating international fertiliser prices and higher import costs.
share price jumped 6% to its day’s high of ₹929, while , added around 5% each to their respective day’s high of ₹477 and ₹1,889.05, respectively.
Rising Subsidy Burden
The proposed increase comes against the backdrop of disruptions arising from the ongoing West Asia conflict, which has driven up global fertiliser prices and disrupted supply chains. Officials have cautioned that if these challenges continue, India’s fertiliser subsidy bill could surpass ₹3 lakh crore in the current financial year.
Any prolonged disruption to shipping through the , a key global trade corridor, could further raise India’s fertiliser import costs and make procurement more difficult. Meanwhile, tightening global supplies are continuing to push prices higher.
Officials, however, pointed out that improving domestic fertiliser production could help partially offset the import burden and reduce the overall subsidy requirement.
India currently provides significant subsidies on key fertilisers to protect farmers from price fluctuations. Neem-coated urea is sold at ₹242 per 45 kg bag, while di-ammonium phosphate (DAP) is priced at ₹1,350 per 50 kg bag.
Expectations of higher subsidy support, coupled with sustained demand prospects, have kept fertiliser stocks firmly on investors’ radar, making the sector one of the top performers in Wednesday’s session.
Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.