New Delhi, Aug. 12 -- Tighter energy norms announced by the government will cut profitability of India's legacy urea plants by about a quarter to Rs 1,250 per tonne, Crisil Ratings said, though diversified earnings are expected to cushion the impact on credit profiles.

The rating agency said in its report, India's urea manufacturing capacity is broadly divided into two categories: legacy plants, which account for around 74 per cent of total capacity, and plants established under the New Urea Policy (NUP) 2012.

It noted, plants under NUP 2012 are assured a 12 per cent return on equity and remain insulated from the latest tightening of energy norms until the policy period expires. The legacy plants are heavily reliant on government subsid...