Bombay Dyeing jumps 20% as firm's board approves sale of land parcel in Worli for nearly Rs. 5,200 crore

Bombay Dyeing share price: Shares of Bombay Dyeing and Manufacturing Company Limited (BDMC) on Thursday (September 14) jumped 20 per cent to hit a 52-week high of Rs 168.50 apiece on the BSE after the company's board on Wednesday approved a proposal to sell the land parcel of about 22 acres in Worli, Mumbai, to Goisu Realty, a subsidiary of Japanese realty developer Sumitomo Group, for Rs 5,200 crore. The stock eventually ended at Rs 153.10 on the BSE, up 9.01 per cent.

On the NSE, the scrip's 52-week high level was Rs 168.60. 

Upon approval of shareholders, BDMC 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 by BDMC and the execution and consummation of the definitive agreements thereto for Phase II, the company said in its regulatory filing.

Commenting on the proposed transaction, Nusli Wadia, Chairman, said:

"I am happy to inform you that BDMC is entering into agreements with Sumitomo Group for the sale of about 22 acres of land (along with the associated FSI) in Worli, Mumbai, for a total consideration of about Rs. 5,200 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 this transaction.
• Report a strong positive net worth.
• Extinguish all its borrowings, thereby saving interest costs and releasing the charge on encumbered assets.
• Pay dividends in the future.
• Have a strong Treasury balance to fund future realty projects."

The company's press release further said that BDMC was able to generate net revenue of about Rs 1,050 crore between April 2022 and June 2023 through the sale of the flats in ICC through focused execution, leading to a reduction in the company’s borrowings by about Rs 900 crore in the same period.

Bombay Dyeing's share price

Over the past 12 months, the stock has rallied 62 per cent (including today's 52-week high level on the NSE). However, in between, the scrip took a heavy beating as the share price touched a low of Rs 53.37 on March 28 this year.