In Thursday’s trading, shares of Bombay Dyeing & Manufacturing Company (Bombay Dyeing) Ltd rose 20% after the company’s board approved a plan to sell a 22-acre land tract in Worli, Mumbai, to a subsidiary of the Japanese giant Sumitomo for Rs 5,200 crore. Bombay Dyeing’s market capitalization (m-cap) on Thursday was Rs 3,376.85 crore on the BSE, thanks to a 168% increase in the stock price over the previous six months.
The shares of Bombay Dyeing stock rose 20% on Thursday to a high of Rs 168.50 on the BSE. Compared to a two-week average of 4.71 lakh shares, a total of 20.73 lakh shares were exchanged on the BSE for this particular counter.
In a filing with the BSE, Bombay Dyeing stated that the buyer will pay them about Rs 4,675 crore for Phase-I. Upon fulfillment of a few requirements and execution and conclusion of the definitive agreements thereon for Phase-II, the remaining money of approximately Rs 525 crore will be released. Through the sale of the apartments in ICC by targeted execution, Bombay Dyeing had previously produced around Rs. 1,050 crore in net revenue between April 2022 and June 2023, which caused a decrease in the company’s borrowings of approximately Rs. 900 crore.
The proposed deal will enable the company to register a pre-tax profit of more than Rs 4,300 crore once it is completed. It would claim a significant increase in net value, pay off all of its debt, and release the charge on any encumbered assets. In the future, Bombay Dyeing stated, it might also pay dividends. According to Bombay Dyeing, it may have a healthy treasury balance to support upcoming real estate initiatives.
The development of the unutilized land parcels available to the company, which has the potential to produce about 3.5 million square feet of residential and commercial property and generate revenue of about Rs. 15,000 crore over the coming years, has also been given preliminary approval by the company board. According to the corporation, the development would be thoughtfully carried out in phases to manage cashflows effectively.
“The company will also evaluate other joint development and partnership opportunities to create a steady pipeline of future revenue and profits,” it added.
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