Nagarjuna Fertilizers planning to invest Rs 4,500 crore on expansion

Nagarjuna Fertilizers planning to invest Rs 4,500 crore on expansionIndia's second-largest urea producer, Nagarjuna Fertilizers and Chemicals Ltd (NFCL) has indiacted that it is aiming to double its capacity at its unit in Kakinada, Andhra Pradesh with an investment of about Rs 4,500 crore.

The company said that it plans to double the capacity at the unit to 2.9 million tonne (mt) from 1.3 mt at present. A company official expressed that the company expects the new capacity will be operational by the year 2015-16.

Nagarjuna will use a mix of equity and debt to fund the investment plan. The company has roped in ICICI Bank to lead the debt finance and equity component will be managed by internal accruals. It is targeting to finalize debt deals son due to the RBI's notification on treating the investments in projects in a similar fashion to investments in infrastructure projects.

"We are hopeful of achieving the financial closure in about six months. All the formalities for the financial closure are done except for a gas supply agreement. Once that is done with GAIL, the other issues would be closed at the earliest," a company spokesperson said.

The company operates two plants at Kakinada on the east coast and it has awarded the engineering, procurement and construction contract to Technimont of Italy for the third plant.