Shares of Bombay Dyeing & Manufacturing Company (NS: BDYN), a prominent player in the textile industry,
surged by an impressive 20%, reaching a new 52-week high of Rs 168.6 per share on Thursday. This remarkable uptick followed the company’s announcement of a strategic move to monetize a substantial 22-acre land parcel, expected to generate approximately Rs 5,200 crore.
During its latest board meeting, the esteemed Board of Directors at Bombay Dyeing gave the proposal to sell this significant land parcel, strategically located in Worli, Mumbai. The buyer is Goisu Realty, a subsidiary of the renowned Japanese real estate firm, Sumitomo Realty & Development. The agreed total consideration for this transaction stands at an impressive Rs 5,200 crore.
It’s important to note that the sale of this valuable land parcel will occur in two distinct phases,
pending approval from Bombay Dyeing’s shareholders. In the initial phase, the company will receive approximately Rs 4,675 crore from Goisu Realty. The balance amount of Rs 525 crore will be disbursed upon fulfilling specific conditions and successfully executing the second phase of the transaction.
This strategic move is set to significantly bolster Bombay Dyeing’s financial position,
with a projected pre-tax profit exceeding Rs 4,300 crore. Additionally, the company anticipates reporting a robust positive net worth while simultaneously eliminating all outstanding borrowings. This translates to substantial interest cost savings and the liberation of previously encumbered assets.
Upon completing this lucrative transaction, Bombay Dyeing will have the financial capacity to declare dividends in the future, coupled with a healthy Treasury balance to support upcoming realty ventures.
In another noteworthy development, the company proudly disclosed that it generated net revenue totaling Rs 1,050 crore between April 2022 and June 2023,
primarily through selling flats in ICC. This focused execution resulted in a significant reduction of borrowings by approximately Rs 900 crore during the same period.