RCF shares fall 4% after receiving notice for recovery of ₹265 crore

The government issued the recovery notice to RCF for unreasonable profits it made from 2019-20 to 2022-23 by not following the reasonability guidelines issued by the Department of Fertilizers, the company said in a stock exchange filing.

In a stock exchange notification issued after market hours on Tuesday, RCF said, “The company is in receipt of notice for provisional recovery based on scrutiny of cost data for NPK units from Department of Fertilizers (DoF), Government of India, amounting to ₹265 crore on account of unreasonable profit for the years 2019-20 till 2022-23 under reasonability guidelines dated November 15, 2019 issued by DoF.”

Notably, NPK refers to the three chemical elements nitrogen, phosphorus, and potassium used in manufacturing fertilisers.

“The said notice was received by the company on June 4, 2024 at 9:30 am. The company has examined the same and the matter is being represented to DoF, to keep the recovery in abeyance,” the notification added.

The RCF stock fell 4% to hit the day’s low of ₹133.8 apiece on the NSE on Wednesday. However, by 11:37am, the stock recovered early losses to trade 2.94% higher at ₹143.5 per share.

In the previous session on Tuesday, RCF shares had plunged almost 14% as stocks of public sector companies took a beating after the Narendra Modi-led Bharatiya Janata Party (BJP) failed to get a clear majority in the Lok Sabha elections.

Year-to-date in 2024, the RCF stock is down 16%, but is still up over 33% in the past year.