Deepak Fertilisers & Petrochemicals Corporation Limited has received a credit rating update from ICRA Limited, with the rating agency reaffirming the company's AA- long-term rating while revising the outlook from Positive to Watch with Developing Implications. The short-term A1+ rating has been withdrawn.

Rating Action Summary

The rating revision affects the company's total rated amount of Rs. 2,186.00 crore. The key changes include:

The detailed instrument-wise breakdown shows the fund-based term loan amount increased from Rs. 1,058.00 crore to Rs. 2,186.00 crore, while short-term non-fund based limits of Rs. 975.00 crore and unallocated limits of Rs. 3.00 crore have been withdrawn.

Impact of West Asia Conflict

The rating watch placement stems from the ongoing West Asia conflict that commenced on February 28, 2026, which has severely disrupted natural gas supplies and caused significant price volatility. The conflict has impacted global supply of critical commodities including ammonia, sulphur, and natural gas due to transit constraints across the Strait of Hormuz.

The Deepak Group faces exposure to short-term gas supply tightness and price volatility, which may constrain ammonia production under Performance Chemiserve Limited. Ammonia serves as a key input for manufacturing nitric acid, technical ammonium nitrate (TAN), and phosphatic fertilisers.

Future Outlook and Mitigation Measures

ICRA expects relief through the Equinor gas contract, scheduled to commence from May 2026, which will substantially meet PCL's entire gas requirement. The surplus volume will be available for sale through Deepak GlobalChem Pte Ltd, potentially easing supply-related pressures.

The upcoming TAN and nitric acid projects are expected to be operationalised by the end of Q1 FY2027, further strengthening the company's market position. Key project details include:

Financial Performance and Liquidity

The company's consolidated financial metrics show healthy performance trends:

ICRA notes that the liquidity position remains adequate, supported by expected healthy cash flow from operations of Rs. 650-700 crore in FY2026, rising to Rs. 1,500-1,700 crore in FY2027.

Key Strengths and Challenges

The rating continues to factor in the company's diversified product portfolio and strong market position in mining chemicals and industrial chemicals. However, challenges include vulnerability to commodity price cyclicality, regulatory risks in the fertiliser business, and project execution risks associated with large debt-funded capex plans.

ICRA will continue monitoring developments regarding gas supply availability and the timely commencement of the Equinor contract, which remain key factors for the rating outlook resolution.

Deepak Fertilisers & Petrochemicals Corporation Limited has issued a clarification to BSE regarding unusual volume movement in its securities, confirming compliance with regulatory disclosure requirements and stating no pending announcements that could influence trading patterns.

BSE Surveillance Inquiry

BSE's surveillance department had noted a significant increase in trading volume of Deepak Fertilisers securities across exchanges in recent periods. The exchange contacted the company on March 27, 2026, requesting clarification under Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Company's Official Response

In its formal response dated March 27, 2026, Deepak Fertilisers addressed the exchange's concerns comprehensively. The company emphasized its consistent adherence to regulatory disclosure norms and transparency requirements.

The key points of the company's clarification included:

• Strict compliance with SEBI Regulation 30 provisions
• Timely filing of all relevant disclosures and announcements
• No pending information or announcements that could impact price or volume behavior
• Attribution of volume movement to market-driven factors

Regulatory Compliance Framework

The company's response highlighted its commitment to maintaining transparency with investors and regulatory bodies. Deepak Fertilisers confirmed that all required information and announcements have been disclosed within stipulated timeframes as mandated by listing regulations.

Market Movement Attribution

The company explicitly stated it has no specific comments on the volume movement, characterizing it as market-driven rather than resulting from any undisclosed corporate developments. This response aligns with standard practice when companies experience unusual trading activity without corresponding internal developments.

The response was signed by Rabindra Purohit, VP - Legal, Compliance & Company Secretary, and was also copied to the National Stock Exchange surveillance department, ensuring comprehensive regulatory communication across both major Indian exchanges.