Madhya Bharat Agro Products Ltd


About the Company

MBAPL was incorporated as a private limited company by Mr. Shailendra Jain along with his relatives in 1997 to set up a Single Super Phosphate (SSP) manufacturing plant in Sagar district, Madhya Pradesh. In September 2004, MBAPL was taken over by Bhilwara-based Ostwal Group. The operations of MBAPL were turned around since January 2005. Further, in September 2016, it came out with an Initial Public Offering (IPO) and listed its shares in the NSE SME Platform, further in August 2019 it shifted to NSE main platform.


The company is manufacturing Beneficiated Rock Phosphate (BRP), Sulphuric Acid (SA), Single Super Phosphate (SSP) and Phosphate Rich Organic Manure (Prom) which is used in large quantities for replenishing “P” (Phosphorus) in the soil and act as a fertilizer for the crop. The company is also engaged in the production of Sulphur Bentonite and some value-added chemicals like oleum etc. Sulphuric acid is a mother chemical for all chemicals. During the current FY 2021-22, they have started manufacturing phosphoric Acid, DAP/NPK Complex fertilizers and enhanced capacity in manufacturing of Sulphuric Acid.

BRP (Beneficiated Rock Phosphate)

With low grade rock phosphate, through the process of BRP, they produce high-grade rock which is mainly used for the production of single super phosphate & Phosphoric Acid which is the raw material of Dia-ammonium phosphate (DAP).

SSP (Single Super Phosphate)

Single Super Phosphate is a fertilizer produced by treating beneficiated/high-grade rock Phosphate with Sulphuric Acid.

This process converts soluble phosphates into forms more readily available to plants. The product is a low-cost source of phosphorus and sulphur in a wide range of pasture situations. SSP is a traditional product for supplying phosphorus and sulphur to pastures, these are the main two nutrients required for pasture production. SSP helps in improving root growth and development which is most important for the uptake of plant nutrients and water.

Granulated Single Super Phosphate

SSP is normally produced in powder form but to increase its ease of sprinkling in farms and also to make it possible to feed SSP with sowing of seeds itself, the demand for granulated SSP (GSSP) is growing. We have the capability to convert SSP into GSSP to the extent of 180000 TPY.

SA (Sulphuric Acid), Oleum 23%, Sulphur Bentonite

Sulphuric Acid and Oleum require Sulphur as raw material, which is easily available indigenously. Sulphuric acid is used by us for the production of SSP and sale in the open market as well, we supply Oleum to an Indian ordinance factory which uses it in the manufacturing of explosives for the Indian Army, it is also used by dyes intermediate and cellulose industry. We have Sulphur sources near to our units at economic freight and competitive price.

Phosphoric Acid

Phosphoric acid, H3PO4, is produced from phosphate rock by thermal process. The reaction, filtration and concentration steps. The phosphate rock is grind and acidified with sulfuric acid in the reactor vessel. The next step is filtration where the solids are separated and washed and the phosphoric acid is received. Finally, the acid is evaporated to obtain the commercial grade.

Diammonium phosphate /NPK Complex Fertilizer

Diammonium phosphate (DAP) is the world’s most widely used phosphorus fertilizer. DAP is made from two common constituents in the fertilizer industry, and its relatively high nutrient content and excellent physical properties make it a popular choice in farming and other industries. It’s formulated in a controlled reaction of phosphoric acid with ammonia, where the hot slurry is then cooled, granulated and sieved.

NPK Complex fertilizer is crop specific and can be customized as per soil requirements. This is mainly used for oil crops, Soya. We are, at present manufacturing 20:20:0:13 NPK fertilizer whose demand in our area of operations is good.

Note on the management group

Ostwal Group is promoted by Mr. Mahendra Kumar Ostwal, Chairman and Managing Director of the Ostwal Group, who has more than two decades of experience in the fertilizer industry and is assisted by his sons, Mr. Pankaj Ostwal and Mr Praveen Ostwal. Further, the directors are assisted by a team of professionals looking after various business functions. The group concern includes Krishana Phoschem Limited (KPL, rated CARE BBB; Positive) and Ostwal Phoschem (India) Limited (OPL, rated CARE BBB; Stable). The group companies benefited in terms of experienced management with strong financial support and their established relationship with dealers and distributors. OPL has 45.17% stake in KPL and 37.71% stake in MBAPL as on March 31, 2019.

Marketing arrangement of its products

Till March 31, 2018, the Ostwal group was marketing its fertilizers through Shriram Fertilizers (SFS) a unit of DCM Shriram Limited. However, due to a change in the policy of subsidy claims where the manufacturer will get a subsidy instead of the marketing company as well as discontinuing the use of the brand name of the marketing company, it discontinued its agreement with SFS. Since April 01, 2018, the group is marketing its fertilizer products under its own brand name “ANNADATA” in the states of Madhya Pradesh, Gujarat, Maharashtra, Rajasthan, Punjab, Haryana, Odisha, Himachal Pradesh, Utter Pradesh and Uttarakhand. The group has appointed a network of 1000 distributors (which include SFS also) who in turn supply to more than 9000 dealers. Further, it sells fertilizer to government-owned co-operative societies as well. Furthermore, the company is marketing chemicals and mainly sells to various traders as well as manufacturing companies.

Arrangement for long-term supply of rock phosphate

Rock phosphate is a scarce material in India with its reserves concentrated in Rajasthan, Madhya Pradesh and Uttar Pradesh. MBAPL has signed a Memorandum of Understanding (MoU) with Madhya Pradesh State Mining Corporation Limited MPSMCL for the supply of 93000 MTPA mined low-grade rock phosphate ore from its Tigora and Mardeora mines, located near its plant, for a period of 20 years from April 30, 2009. Owing to the assured supply of raw materials, MBAPL gets the benefit in terms of the availability of raw materials for its BRP plant at lower transportation costs translating into better operating margins for the company.

Why am I not investing?

Too many related party transactions. I have highlighted the big items below:

Company Name % of sales
Ostwal Phoschem (India) Limited 20.3
Krishana Phoschem Limited 50.9
Seasons International Private Limited 4.1
Shree Ganpati Fertilizers Limited 2
Kanchi Resorts Private Limited 2
Loan Taken From : In FY22
Krishana Phoschem Ltd. 6 cr.
Ostwal Phoschem (India) Ltd. 34 cr.
Seasons International Private Limited 1.5 cr.

Other risks:

  1. Vulnerability of profitability margins to fluctuation in the prices of rock phosphate - Some part of the raw material is taken from its own mines and some part of the raw material is purchased from domestic players. The company is exposed to raw material price fluctuation risk to the extent its purchases raw material from other suppliers.
  2. Highly regulated fertilizer and chemical industry - Government can change policies at any moment. Like it started paying subsidies directly to manufacturers rather than marketers.
  3. Elongated raw material inventory holding period
  4. Continuously rising debt

Reason for creating this thread:

As I always check ValuePickr before reading about any company. This thread might help others in the future and they can save their time. It also has some short notes about DAP, SSP and phosphoric acid.

Disclosure: Not invested because of too many related party transactions.


Industry tailwind ahead 2024

  1. Low NBS Rates
  2. Oversupply and low demand in international market ( Low fertiliser prices in internationally )
  3. Indian government capping margin to 8-12% for P&K fertilizers
  4. Government promoting unprovan nano Urea, Nano DAP to save subsidy
  5. Bharat branding of all fertilisers
  6. China increase DAP exports and might lift ban after apr 2024 which will lead to lower prices

Disclosure : exited from Krishana Phoschem ( MBAPL sibling )

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