Shares of Fertilisers and Chemicals Travancore Ltd (FACT) remained in focus on Wednesday after the Kochi-based public sector company said it faces a penal interest liability of around Rs 438 crore on loans taken from the government. 

The company has approached the Centre seeking a waiver of the penal interest, making the development important for investors tracking its financial position. FACT has been carrying a significant government loan burden for several years. 

The company had received a Rs 1,000 crore plan loan from the Centre in 2016 to address its financial difficulties and restart operations. The loan was sanctioned at an interest rate of 13.5%, with repayment scheduled to begin from April 2017.

The latest penal interest issue adds another layer to FACT’s long-standing debt concerns. A credit assessment in 2025 showed that the company had outstanding loans of Rs 1,770.49 crore, while accrued interest stood at Rs 1,673.11 crore as of March 31, 2024. 

FACT had proposed restructuring the government debt by seeking a waiver of interest, converting part of the liability into equity and repaying the remaining amount through interest-free instalments.

For investors, any decision by the government on the waiver could have a meaningful impact on FACT’s financial position. A reduction in the liability could ease pressure on the company’s balance sheet and improve its ability to deploy funds towards operations and expansion.

FACT has also shown signs of a recovery in recent years after a long period of financial stress. The company reported a profit of Rs 41.23 crore in FY25, although this was significantly lower than the Rs 128.27 crore profit recorded in FY24. Revenue also declined to Rs 4,267.36 crore from Rs 5,254.33 crore during the same period.

The company remains under close watch because of its high debt and interest burden. FACT’s current share price is around Rs 807, according to market data available today, while the stock has traded between Rs 652 and Rs 1,059 over the past 52 weeks.

At 3:30 pm, the shares of Fertilisers and Chemicals Travancore closed 1.01% lower at Rs 807 on NSE.

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