Deepak Fertilisers & Petrochemicals Corporation shares rallied over 6% in Thursday's trade following the Union Cabinet's approval of a new investment policy aimed at boosting domestic urea production. According to reports from Essential Business Intelligence, the stock surged as much as 6.49% to an intraday high of ₹1,643.10 per share on the BSE. At 11 am, Deepak Fertilisers was trading 4.65% higher at ₹1,614.65, outperforming the BSE Sensex, which was up 0.48% at 77,556.
The rally followed the Cabinet Committee on Economic Affairs' approval of the National Investment Policy for Urea-2026 for Atmanirbhar Bharat (NIPU-2026), a policy aimed at attracting fresh investments in India's urea manufacturing sector and reducing the country's dependence on imports. As reported by Essential Business Intelligence, the new framework introduces several structural changes compared with the earlier New Investment Policy (NIP)-2012, including separation of fixed and variable costs for greater transparency, introduction of a return on equity (RoE) band with a floor of 12% and ceiling of 16%, and mitigation of foreign exchange risk by converting fixed costs into Indian rupees after four years based on prevailing exchange rates.
According to the government, these measures are expected to generate savings of over ₹250 crore per plant established under NIPU-2026 compared with projects approved under NIP-2012. According to Essential Business Intelligence, the government has received multiple proposals for setting up new urea plants, necessitating a fresh investment policy after the earlier NIP-2012 expired in October 2019. Under NIP-2012, six new urea plants were commissioned, including four through joint ventures involving public sector companies and two by private firms.
India currently has 33 operational urea manufacturing units with a total installed capacity of 269.42 lakh metric tonnes (LMT). However, as reported by Essential Business Intelligence, domestic production continues to fall short of demand, making the country reliant on imports to bridge the gap. With NIPU-2026 now in place, the government expects fresh investments in domestic urea production, helping improve long-term supply security while reducing import dependence.
