Deepak Nitrite continues falling

It started with a fire and now it is ballooning into a bigger crisis for Deepak Nitrate.

On 2nd June, the company said that the fire and series of explosion at its Nandesari unit damaged warehouse / offices/ some utilities and part of manufacturing facility of Sodium Nitrite that were facing the warehouse.

And then there was a report in Financial Express yesterday stating that the Gujarat government has seemed to have issued closure notice to this unit over these Nandesari explosions. The report said that  the company will not be permitted to start production activities till it follows compliances related to plant and building safety.

The stock exchanges had sought clarification from the company over this news yesterday evening. And there as no response till noon today. Till then the stock went down 5% to an intraday low at Rs.1715.80, not too far from its 52-week low of Rs.1712.50.

In the clarification issued now, the company in a very roundabout way confirms this news – “We appreciate the prompt and professional initiatives by the government authorities wherein they have echoed similar desire i.e. to restart the Plant only after stabitity studies / other necessary compliances are done and they too find these satisfactory for safe restart.”

It says, “We are confident that the regulatory authorities upon finding these reports satisfactory as well as all other compliances met with would be prompt in allowing us to restart the Plant.”

The stock remains in the red, trading 1.5% lower at Rs.1771.30.