Krishana Phoschem Ltd, a prominent name in the fertiliser and chemical industry, has announced its in-principal approval for a significant capacity expansion project in Madhya Pradesh. In a filing with the National Stock Exchange (NSE) under Regulation 30 of SEBI (LODR) Regulations, 2015, the company declared plans to set up two major plants in Meghnagar, Jhabua district.

This move marks a strategic milestone in Krishana Phoschem’s growth trajectory and underlines its commitment to strengthening India’s agricultural input supply chain.

Details of the Expansion Project

During its Board Meeting held on 19th June, 2025, Krishana Phoschem Ltd approved the setting up of:

• A 500 TPD (tonnes per day) DAP/NPK fertiliser plant

• A 300 TPD Sulphuric acid plant

• And/or any other manufacturing activity related to fertilisers

These plants will be developed at the company’s existing site in Meghnagar, within the AKVN Industrial Area, located in District Jhabua, Madhya Pradesh.

The project demonstrates the company’s intent to diversify and expand its existing operations to meet rising demand for phosphatic and compound fertilisers, and increase its footprint in the chemical sector.

Strategic Importance of DAP/NPK and Sulphuric Acid Production

DAP (Diammonium Phosphate) and NPK (Nitrogen Phosphorus Potassium) are among the most widely used complex fertilisers in Indian agriculture. By adding a 500 TPD facility, Krishana Phoschem aims to:

• Cater to the high demand for fertilisers in India’s core agricultural regions

• Strengthen its market share in the fertiliser sector

• Support farmers with consistent availability of essential nutrients

Sulphuric acid, on the other hand, is a critical raw material for several fertiliser processes. A 300 TPD plant will allow Krishana Phoschem to:

• Ensure backward integration

• Lower its dependence on external suppliers

• Reduce production costs and improve profit margins

Financial Structure of the Project

The project will be funded through a combination of debt and internal accruals. While the exact investment figure has not been disclosed, the method of financing indicates a conservative capital strategy. The use of internal accruals highlights the company's strong financial health, while the debt component will enable scalability.

This also points to efficient capital utilisation and a desire to maintain a balanced debt-equity ratio, ensuring financial sustainability even as the company embarks on significant expansion.

Compliance and Governance

The disclosure was made in full compliance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, confirming the company’s commitment to transparency and timely disclosure.

The announcement was signed off by Mr. Anil Sharma, Company Secretary of Krishana Phoschem Ltd, on 19th June 2025, and the communication has been duly submitted to the NSE.

Registered and Operational Infrastructure

Krishana Phoschem’s registered office is located at:

• Wing A/2, 1st Floor, Ostwal Heights, Urban Forest, Atun, Bhilwara - 311802 (Rajasthan)

The proposed expansion will take place at the existing manufacturing site situated at:

• AKVN Industrial Area, Meghnagar - 457779, District Jhabua, Madhya Pradesh

The location offers strategic logistical advantages, especially for servicing Madhya Pradesh, Gujarat, and neighbouring agricultural markets.

Impact on Shareholders and Industry

This move is expected to bring long-term benefits for stakeholders, especially as demand for fertilisers continues to rise due to increased cropping intensity, government subsidies, and monsoon-driven agricultural cycles.

Shareholders can expect:

• Higher revenues post-commissioning of the new plants

• Improved EBITDA margins owing to backward integration

• A stronger competitive position in both domestic and export markets

Additionally, the move signals sectoral confidence, especially at a time when global fertiliser prices are volatile and supply chains are strained. By producing locally, Krishana Phoschem contributes to the government’s Atmanirbhar Bharat mission in the agri-input sector.

Environmental and Regulatory Aspects

Given the nature of fertiliser and acid manufacturing, Krishana Phoschem will have to comply with various environmental clearances and state-level industrial norms. The company's experience in handling regulated products positions it well for adhering to such requirements.

Key considerations would include:

• Pollution control and emission standards

• Effluent treatment systems

• Occupational safety of plant workers

• Sustainable waste disposal practices

Future Prospects

The decision to expand in Meghnagar aligns with Krishana Phoschem’s broader strategic plan to be a leader in the Indian fertiliser space. Given India’s thrust on self-sufficiency and reducing imports of fertilisers, domestic players with scale and agility like Krishana Phoschem are poised to benefit.

Potential future developments may include:

• Product portfolio diversification (e.g., micronutrients, water-soluble fertilisers)

• Increased automation and digitisation of the manufacturing process

• Joint ventures or strategic partnerships with agro-tech companies

Conclusion

The board’s in-principal approval for a 500 TPD DAP/NPK plant and 300 TPD Sulphuric acid facility at Meghnagar marks a pivotal move in Krishana Phoschem's growth strategy. Funded through debt and internal accruals, the project promises to enhance manufacturing capabilities, support the domestic fertiliser supply chain, and reinforce the company’s market leadership.

With a sharp focus on operational expansion, backward integration, and financial prudence, this initiative is poised to deliver substantial value for shareholders, farmers, and the broader agricultural ecosystem in the years ahead.

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