Bombay Dyeing shares surge 20% on Rs 5,200 crore Worli land deal. Key details

Shares of Bombay Dyeing & Manufacturing Company Ltd (Bombay Dyeing) surged 20 per cent in Thursday's trade after the company's board approved a proposal to sell the land parcel of about 22 acres in Mumbai's Worli to a subsidiary of Japanese conglomerate Sumitomo for Rs 5,200 crore. At Thursday's intraday level, the market capitalistaion (m-cap) of Bombay Dyeing stood at Rs 3,376.85 crore on BSE, thanks to a 158 per cent rally on the counter in the last six months.

On Thursday, the stock hit a high of Rs 168.50 on BSE, up 20 per cent. A total of 20.73 lakh shares changed hands on the counter on BSE against a two-week average of 4.71 lakh shares.           

In a filing to BSE, Bombay Dyeing said it will receive about Rs 4,675 crore from the buyer for Phase-I. The balance amount of about Rs 525 crore will be received upon completion of certain conditions and execution & consummation of the definitive agreements thereto for Phase- II. Bombay Dyeing  had earlier generated a net revenue of about Rs 1,050 crore between April 2022 and June 2023, through sale of the flats in ICC by focused execution, leading to a reduction in the company’s borrowings by about Rs. 900 crore.

On completion of the proposed transaction, the company will be able to record a pre-tax profit in excess of Rs 4,300 crore on account of the transaction. It would report a strong positive net worth and extinguish all its borrowings thereby saving interest costs and releasing the charge on encumbered assets. Bombay Dyeing said it may also pay dividend in future. Bombay Dyeing said it may have a strong treasury balance to fund the future realty projects.

Meanwhile, the company board has also, in-principle, approved the development of the unu�lised land parcels available with the company having a potential to create about 3.5 million square feet of residential /commercial property and generate a Revenue of about Rs. 15,000 crore over the next few years. The development will be planned judiciously in phases to manage company’s cashflows efficiently, the company said.

“The company will also evaluate other joint development and partnership opportunities to create a steady pipeline of future revenue and profits,” it said.

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