Bombay Dyeing board approves land deal greater than m-cap, stock zooms 20%

Bombay Dyeing and Manufacturing Company’s share price rose 20% to a 52-week high of Rs 168.50 in its first trading session on September 14 after the company’s board accepted approved the sale of a 22-acre plot of land in Worli, Mumbai. The transaction’s value of Rs 5,200 crore is higher than Bombay Dyeing’s closing market capitalization of Rs 2,900 crore on September 13, when the deal was announced. Analysts believe the company could seek to reduce debt with the proceeds from the transaction. The group’s debt currently stands at Rs 3,969 crore.
The board of directors of the company has approved the proposal to sell a plot of land measuring about 22 acres (with reference to FSI) at Worli, Mumbai to Goisu Realty Private Limited (a subsidiary of Sumitomo Realty & Development Company Limited) in 2 phases, at a total consideration of around Rs 5,200 crore, subject to shareholders’ approval. After shareholder approval, the company will receive around Rs 4,675 crore from the buyer for Phase I and balance around Rs 525 crore once the company meets certain conditions and executes and completes deals.

The Board of Directors has decided to convene an extraordinary general meeting (EGM) of the company’s members and notice of the meeting will be sent out in due course. The sales contract (phase I) is expected to be signed by September 30, 2023 at the latest, and for phase II by the 423-24 quarter.
Post completion of the proposed transaction, the company will be able to book pre-tax profits in excess of Rs 4,300 crore through this transaction, report a strong positive net worth, settle all its borrowings , thereby saving interest costs and releasing the above fees. The company said in the statement that the assets were encumbered.
The BDMC Board of Directors set out a strategy in March 2022 to change the company’s trajectory by focusing on the real estate sector for future growth and profitability, accelerating apartment sales in Island City Center (ICC), Dadar, by monetizing land. banking, etc., the company added. 35 lakh shares (1.7% stake) worth Rs 58.6 crore of Bombay Dyeing changed hands during the block trade, CNBC-TV18 reported.
The Board of Directors has also approved the development of available unused land parcels in principle, with the Company having the potential to create approximately 3.5 million square feet of residential/commercial real estate and generate turnover ‘about Rs 15,000 crore in the next few years. . .
The company will also evaluate other cooperation and joint development opportunities to create a stable source of revenue and profits in the future.
The company’s consolidated loss widened to Rs 119.8 crore in the quarter ended 2023, compared to Rs 76.8 crore in the year-ago period. Its revenue fell 17.87% year-on-year to Rs 498 crore.

Other Wadia Group stocks are also seeing buying interest, including Britannia Industries, up 0.21 per cent at Rs 4,618, and National Peroxide quoted at Rs 2,051.10, up Rs 126.90, equivalent to 6.59% on BSE.

Bombay Burmah Trading Corporation hit a 52-week high of Rs 1,375.70 and traded at Rs 1,291.95, up Rs 87.55, or 7.27 per cent, on the BSE.