RASHTRIYA CHEMICALS AND FERTILIZERS LTD OFFER FOR SALE 29 - JUN

RASHTRIYA CHEMICALS AND FERTILIZERS LTD OFFER FOR SALE 29 - JUN - 2017 OFFER BACKGROUND The President of India (acting through and represented by the Ministry of Chemicals & Fertilizers, Government of India) (the "Seller") announced its intention to sell up to 2,75,84,405 equity shares of the Company of face value of INR 10/- each, representing 5% of the total paid up equity share capital of the Company (the "Offer Shares"), on June 29, 2017 (for non-retail Investors) and June 30, 2017 (for Retail Investors and for non-retail Investors who choose to carry forward their bids) in accordance with SEBI circular no. CIR/MRD/DP/18/2012 dated July 18, 2012 regarding Comprehensive Guidelines for Offer for Sale of Shares by Promoters through the Stock Exchange Mechanism, as amended by SEBI circular no. CIR/MRD/DP/36/2016 dated February 15, 2016, SEBI circular no. CIR/MRD/DP/12/2015 dated June 26, 2015, SEBI circular no. CIR/MRD/DP/04/2013 dated January 25, 2013, SEBI circular no. CIR/MRD/DP/24/2014 dated August 8, 2014 and SEBI circular no. CIR/MRD/DP/31/2014 dated December 01, 2014. The particulars of the above offer for sale are attached to this notice. Further upto 5% of the Offer shares (over and above the number of Offer Shares) could be offered to eligible and willing employees of the company at a discount of upto 5% of the Cut-off Price subsequent to completion of the Offer. THE SYNOPSIS OF THE OFFER FOR SALE IS AS FOLLOWS: Stock Data Latest Data (As on June 28, 2017) Latest Equity(Subscribed) 551.69 Latest Reserve 2373.35 Latest EPS -Unit Curr. 3.25 Latest Bookvalue -Unit Curr. 53.02 Face Value 10.00 Stock Exchange BSE Latest Market Price--Unit Curr. 79.90 Latest P/E Ratio 24.59 Latest P/BV 1.51 52 Week High -Unit Curr. 99.75 52 Week High-Date 15/05/2017 All Time High -Unit Curr. 150.35 All Time High-Date 07/01/2008 52 Week Low -Unit Curr. 40.50 52 Week Low-Date 21/11/2016 All Time Low -Unit Curr. 4.00 All Time Low-Date 19/10/2000 Market Capitalisation 4408.00 Dividend Yield -% 1.38 Name of the Seller (Promoter/Promoter Group) The President of India, acting through and Name of the company whose shares are proposed to be sold and ISIN Name of the stock exchanges where orders shall be placed Name of the designated stock exchange represented by the Ministry of Chemicals & Fertilizers, Government of India. Rashtriya Chemicals and Fertilizers Limited BSE and NSE Date and time of opening and closing of For Non-retail : June 29, 2017 the sale Allocation Methodology Number of shares proposed to be sold by the seller pursuant to the sale Name of the broker(s) on behalf of the Seller (the "Seller's Broker") Floor Price BSE Open: 9.15 a.m., Close: 3.30 p.m. For retail+non-retail : June 30, 2017 Open: 9.15 a.m., Close: 3.30 p.m. 20% of the Offer Shares being offered in the Offer shall be reserved for Retail Investors, subject to receipt of valid bids. Retail Investors will be allocated Offer Shares at a discount of 5% to the bid price entered by them in accordance with the SEBI OFS Circulars. Price priority method at multiple clearing prices 2,75,84,405 (approx. 5% of the total paid up equity share capital) SBICAP Securities Limited IDBI Capital Market and Securities Limited Rs.74.25/- Price movement Chart TOTAL & AVERAGES DELIVERABLE VOLUME (BSE) Total Avg No. Of Del. Volume Del. Volume Days Weekly 410753 102688 4 Fornightly 930844 103427 9 Monthly 2100847 95493 22 Quarterly 11169915 180160 62 Half Yearly 23825452 193703 123 Yearly 37161568 150452 247 1

Key Findings Rashtriya Chemicals and Fertilizers Limited (RCF) is one of the most revered public sector undertakings in India. A Mini Ratna company, it has two manufacturing units, one at Trombay, in Mumbai which has completed 50 excellent years in the fertilizers and chemicals domain and the other at Thal in the Raigad district of Maharashtra. RCF has, over the last five decades, displayed a distinctive work culture and management style, a concern for the community and the environment, and of course, an innate affection for the farmer. The company is planning to undertake major projects by participating in the revival of closed fertilizer units, Additional Ammonia Urea project at Thal, Coal Based Fertilizer Plant at Talcher, and a Urea Plant in Iran for import of Urea to India through a JV. It is also carrying out a number of energy conservation projects which will improve the profitability of the Company in the coming years. Moreover, according to the management, it is also looking for opportunities for long term off take agreements for procurement of fertilizers, to ensure sustained growth. The government will sell over 2.75 crore equity shares in Rashtriya Chemicals and Fertilisers (RCF) on 29-30 June for about Rs200 crore as part of its plan to divest shares in PSUs.The government currently holds 80% stake in RCF and will offload 5% through the Offer for Sale (OFS) route. According to crisil report, it is improving working capital position as a result of lower subsidy receivables, strong liquidity and expected improvement in operating performance over second half of fiscal 2017 and fiscal 2018. Working capital position for urea players including RCF has improved in fiscal 2017 as a result of part liquidation of past subsidy arrears. This is because of reduction in pooled gas prices that led to lowering of Government's subsidy bill as against relatively unchanged subsidy allocation for indigenous urea manufacturers for the fiscal. RCF's operating performance is expected to improve driven by higher capacity utilisation and lower energy consumption in second half of fiscal 2017, this is because both the Thal and Trombay plant were under scheduled maintenance shutdown during first half of fiscal 2017. Comments: The company has reported steady growth both in terms of revenue and profitability. During Q4FY17, it has reported 36% growth in bottom line with the help of 11% growth in topline on QoQ basis. Since last 2 quarters, company has reported good top line and bottom line growth. However, overall the company has reported a reasonably good year for the fertilizer industry with overall volumes rising. The domestic production of Urea witnessed healthy growth, driven by favorable policy changes of GOI and the Gas Pooling policy (which resulted in uniform gas costs for all gas- based units). Government of India, during the year has mandated 100% production of neem coated urea and according to management, Neem coating ensures slow release of nitrogen resulting in lower usage of urea, prevents leaching of soil nutrient and hinders diversion of urea for non-agricultural uses. This will reduce the consumption of urea by 10-15%. As far as environment is concerned, normal prilled Urea use-efficiency is 30 %( Paddy crop). The beginning of monsoon this year has been very encouraging with widespread good rains in the month of June and July. In case the normal rainfall continues during the balance monsoon period, management expects the systemic inventory levels to come down to more reasonable levels by the end of the kharif 2017 season. Based on current P/Ex of 24.59, we expect the stock to see a price target of Rs. 92 on its FY18E EPS of 3.75. Approximately, 23% upside from the current market price of Rs.75.20/-. The Issue Size of the company is Rs 200 crore. P/E Chart 250.00 200.00 150.00 100.00 50.00 0.00 30-Jun-14 5-Aug-14 11-Sep-14 22-Oct-14 1-Dec-14 6-Jan-15 11-Feb-15 19-Mar-15 28-Apr-15 3-Jun-15 8-Jul-15 12-Aug-15 16-Sep-15 27-Oct-15 3-Dec-15 8-Jan-16 15-Feb-16 22-Mar-16 3-May-16 7-Jun-16 13-Jul-16 18-Aug-16 26-Sep-16 2-Nov-16 8-Dec-16 12-Jan-17 20-Feb-17 29-Mar-17 8-May-17 12-Jun-17 6 14 22 30 Close Price 2

Shareholding Pattern (%) Description as on 31/03/2017 31/12/2016 30/09/2016 30/06/2016 Total Foreign 0.88 1.1 1.08 1.06 Total Institutions 6.91 6.82 6.86 6.9 Total Non Promoter Corporate Holding 2.33 1.58 1.35 1.32 Total Promoters 80 80 80 80 Total Public & Others 9.89 10.5 10.71 10.72 Public and holding more than 1% of the total number of shares Description as on 31/03/2017 31/12/2016 30/09/2016 30/06/2016 LIC of India 5.4 5.4 5.4 5.4 BSE DATA Date High -Unit Curr Low -Unit Curr Weekly 84.35 76.50 Monthly 90.00 76.50 3 Month 99.75 70.90 6 Month 99.75 45.45 1 Year 99.75 40.50 Quarterly result Qtr Ending Mar.17 Qtr Ending Mar.16 VAR % Total Income 2216.24 2000.93 10.76 OPM (%) 4.93 5.09 - OP 109.31 101.84 7.34 Other income 20.62 30.04-31.36 PBIDT 129.93 131.88-1.48 Net Finance Charges 17.03 48.29-64.73 PBDT 112.90 83.59 35.06 Depreciation 35.87 35.23 1.82 PBT 77.03 48.36 59.28 Tax expense 21.94 7.96 175.63 PAT 55.09 40.40 36.36 3

BalanceSheet SOURCES OF FUNDS : 201603 201503 201403 201303 201203 SOURCES OF FUNDS : Share Capital 551.69 551.69 551.69 551.69 551.69 Reserves Total 2276.80 2164.63 1938.36 1794.02 1617.86 Total Shareholders Funds 2828.49 2716.32 2490.05 2345.71 2169.55 Secured Loans 1575.97 1076.19 1241.56 1134.23 391.83 Unsecured Loans 1466.43 923.46 538.44 635.34 890.88 Total Debt 3042.40 1999.65 1780.00 1769.57 1282.71 Other Liabilities 336.14 205.85 158.40 149.45 147.62 Total Liabilities 6207.03 4921.82 4428.45 4264.73 3599.88 APPLICATION OF FUNDS : Gross Block 4252.65 4120.69 4073.98 3747.92 3501.10 Less: Accumulated Depreciation 2584.28 2453.75 2329.23 2210.04 2075.34 Less: Impairment of Assets 124.26 115.07 68.43 61.96 21.28 Net Block 1544.11 1551.87 1676.32 1475.92 1404.48 Capital Work in Progress 149.97 61.50 77.37 184.26 227.49 Investments 0.17 0.17 0.17 0.35 0.17 Current Assets, Loans & Advances Inventories 1237.09 1009.21 808.60 1210.47 1178.24 Sundry Debtors 4315.46 3297.51 2769.10 2579.21 1978.24 Cash and Bank 3.85 85.62 72.01 177.14 592.47 Loans and Advances 92.49 70.01 95.76 95.80 132.09 Total Current Assets 5648.89 4462.35 3745.47 4062.62 3881.04 Less : Current Liabilities and Provisions Current Liabilities 1146.71 940.25 755.48 1160.94 1681.68 Provisions 195.85 226.31 204.31 195.66 146.51 Total Current Liabilities 1342.56 1166.56 959.79 1356.60 1828.19 Net Current Assets 4306.33 3295.79 2785.68 2706.02 2052.85 Deferred Tax Assets 100.15 105.95 78.14 73.70 60.73 Deferred Tax Liability 310.75 302.68 335.14 316.75 274.84 Net Deferred Tax -210.60-196.73-257.00-243.05-214.11 Other Assets 417.05 209.22 145.91 141.23 129.00 Total Assets 6207.03 4921.82 4428.45 4264.73 3599.88 Contingent Liabilities 451.30 443.88 512.78 315.62 27.33 4

Profit and Loss Account SOURCES OF FUNDS : 201603 201503 201403 201303 201203 (12) (12) (12) (12) (12) INCOME : Sales Turnover 8801.64 7863.78 6723.68 6918.15 6532.22 Excise Duty 142.19 148.21 135.59 144.17 98.51 Net Sales 8659.45 7715.57 6588.09 6773.98 6433.71 Other Income 112.23 74.49 74.45 93.15 166.74 Stock Adjustments 233.62 8.03-309.56 7.23 459.21 Total Income 9005.3 7798.09 6352.98 6874.36 7059.66 EXPENDITURE : Raw Materials 4367.34 3638.94 2815.44 3391.48 3956.21 Power & Fuel Cost 2389.18 1585.79 1324.93 1242.38 1015.11 Employee Cost 493.7 527.51 443.18 471.94 423.84 Other Manufacturing Expenses 1045.25 999.57 932.98 918.51 318.01 Selling and Administration Expenses 90.75 86.31 83.73 126.42 733.35 Miscellaneous Expenses 35.65 40.25 112.32 64.09 65.69 Less: Pre-operative Expenses Capitalised 0 0 0 21.69 21.97 Total Expenditure 8421.87 6878.37 5712.58 6193.13 6490.24 Operating Profit 583.43 919.72 640.4 681.23 569.42 Interest 148.13 123.08 137.24 133.6 52.53 Gross Profit 435.3 796.64 503.16 547.63 516.89 Depreciation 150.22 263.32 144.59 175.58 142.84 Profit Before Tax 285.08 533.32 358.57 372.05 374.05 Tax 86 247.84 103.5 70.28 66.62 Deferred Tax 13.87-60.27 13.93 28.94 58.6 Net Profit 185.21 345.75 241.14 272.83 248.83 Net Profit after Minority Interest & P/L Asso.Co. 185.21 345.75 241.14 272.83 248.83 Extraordinary Items -0.49-4.34-1.18-0.03-0.96 Adjusted Net Profit 185.7 350.09 242.32 272.86 249.79 Cash Flow Statement Cash Flow Summary 201603 201503 201403 201303 201203 Cash and Cash Equivalents at Beginning of the year 83.52 69.81 46.6 97.32 419.39 Net Cash from Operating Activities -637.64 211.71 315.32-555.77-150.26 Net Cash Used in Investing Activities -258.5-201.36-82.21 224.96-791.21 Net Cash Used in Financing Activities 814.67 3.35-209.94 280.52 619.43 Net Inc/(Dec) in Cash and Cash Equivalent -81.47 13.7 23.17-50.29-322.04 Cash and Cash Equivalents at End of the year 2.05 83.51 69.77 47.03 97.35 5

Ratios 201603 201503 201403 201303 201203 Key Ratios Debt-Equity Ratio 0.91 0.73 0.73 0.68 0.43 Long Term Debt-Equity Ratio 0.11 0.15 0.13 0.12 0.12 Current Ratio 1.37 1.46 1.35 1.28 1.38 Turnover Ratios Fixed Assets 2.1 1.92 1.72 1.91 1.93 Inventory 7.84 8.65 6.66 5.79 7.62 Debtors 2.31 2.59 2.51 3.04 4.61 Total Asset Turnover Ratio 1.58 1.68 1.55 1.76 2.07 Interest Cover Ratio 2.92 5.33 3.61 3.78 8.12 PBIDTM (%) 6.63 11.7 9.52 9.85 8.72 PBITM (%) 4.92 8.35 7.37 7.31 6.53 PBDTM (%) 4.95 10.13 7.48 7.92 7.91 CPM (%) 3.81 7.75 5.74 6.48 6 APATM (%) 2.1 4.4 3.59 3.94 3.81 ROCE (%) 7.79 14.04 11.41 12.86 13.5 RONW (%) 6.68 13.28 9.97 12.08 11.91 Payout (%) 35.11 30.5 36.44 31.98 32.69 E-mail: researchfeedback@smcindiaonline.com Corporate Office: 11/6B, Shanti Chamber, Pusa Road, New Delhi - 110005 Tel: +91-11-30111000 www.smcindiaonline.com Mumbai Office: Lotus Corporate Park, A Wing 401 / 402, 4th Floor,Graham Firth Steel Compound, Off Western Express Highway, Jay Coach Signal, Goreagon (East) Mumbai - 400063 Tel: 91-22-67341600, Fax: 91-22-28805606 Kolkata Office: 18, Rabindra Sarani, Poddar Court,Gate No.- 4, 5th Floor, Kolkata-700001 Tel: 91-33-39847000, Fax: 91-33-39847004 SMC Global Securities Ltd. 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