Chambal Fertilisers Set to Launch Technical Ammonium Nitrate Production

Intermediate product output begins May 15, 2026, with full production expected by May 31, 2026. This expansion into industrial chemicals marks a key diversification for the company.

Production Update

Chambal Fertilisers & Chemicals Ltd announced that its project to manufacture Technical Ammonium Nitrate (HDAN) and Weak Nitric Acid (WNA) at its Gadepan, Rajasthan facility is nearing completion.

Commissioning activities are currently underway for the new plants. The company expects to start producing intermediate products, Weak Nitric Acid (WNA) and Ammonium Nitrate Solution (ANS) Melt, from May 15, 2026.

Full-scale production of prilled High Density Ammonium Nitrate (HDAN) is scheduled to begin by May 31, 2026. This marks the project's completion at its existing site.

Strategic Expansion

This new facility signifies Chambal Fertilisers' entry and expansion into the industrial chemicals segment, moving beyond its core fertilizer business. It opens a new revenue stream and diversifies the company's product portfolio.

The commencement of operations will reduce reliance on existing products and enhance overall profitability, positioning the company to tap into the growing demand for industrial nitrates.

Project Development

Chambal Fertilisers has invested significantly in this Technical Ammonium Nitrate (TAN) project at its Gadepan site. The project cost was revised to approximately INR 1,645 crore, with substantial capital invested as of Q3FY26.

Larsen & Toubro (L&T) was appointed as the EPC contractor, using technology from Casale for the Weak Nitric Acid and Ammonium Nitrate Solution plants. By March 31, 2025, the project was about 68% complete, with construction progressing rapidly.

Key Impacts

• A new manufacturing line for Technical Ammonium Nitrate and Weak Nitric Acid will become operational.
• The company gains access to the industrial chemicals market, diversifying its revenue base.
• Production capacity will increase, supporting potential future growth.
• This represents a significant step in CFCL's strategy to broaden its industrial footprint.

Potential Challenges

Chambal Fertilisers has faced several tax and GST penalties. These include a INR 1.35 crore Income Tax penalty for AY 2020-21 and a INR 15.6 crore CGST penalty for disallowed transitional credit. The company plans to contest these orders, believing it has strong cases on merits, and does not expect them to materially impact financial or operational activities beyond the penalty amounts.

Market Landscape

Chambal Fertilisers enters a segment with established players such as Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) and Mahadhan Agritech Limited. DFPCL is a leading Technical Ammonium Nitrate manufacturer in India, serving sectors like mining and infrastructure. Mahadhan Agritech is also a significant producer and the sole manufacturer of explosive-grade Low Density Porous Prilled Ammonium Nitrate (LDAN) in the country.

Project Investment Details

• As of Q3FY26, Chambal Fertilisers had invested INR 11,836 million (approx. ₹1183.6 crore) in the TAN project.
• The total approved project cost was INR 1,645 crore.

Looking Ahead

• Confirmation of production start dates: May 15, 2026, for intermediates and May 31, 2026, for full HDAN production.
• The pace of production ramp-up and initial sales of TAN and WNA.
• Market reception and pricing for the new products.
• Updates on the company's appeal against tax penalties.
• Future expansion plans in the industrial chemicals segment.