Deepak Fertilizers And Petrochemicals Corporation Limited has informed the Exchange about intimation under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
DEEPAKFERT · price
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The board of Deepak Mining Solutions Limited (DMSL), a wholly owned material subsidiary of Deepak Fertilizers, has approved a revision in the estimated cost of its Technical Ammonium Nitrate (TAN) Project at Gopalpur from ₹2,223 Crores (as estimated in November 2020) to ₹2,675 Crores — an increase of about ₹452 Crores (~20%). The hike is attributed to steep rises in raw material prices (stainless steel up from ₹250/kg to ₹370/kg, carbon steel from ₹43/kg to ₹77/kg), higher manpower and construction costs, currency depreciation (USD/INR from 74.55 to 85.13), additional safety and sustainability investments, extra costs for an ammonia pipeline due to the port ownership change from Shapoorji to Adani, and setting up an in-house effluent treatment and zero liquid discharge system because the Tata SEZ common effluent plant was unavailable. With over 90% of project requirements already ordered or arrived, the company expects no further cost escalations and states that the project's IRR remains above its internal benchmarks.
Shareholders should note a meaningful rise in project capital outlay, though the company maintains that returns remain healthy. In the near term, the stock may see mild pressure due to cost concerns, but the near-completion status (90%+ executed) and continued strong projected returns should limit negative impact.