Bombay Dyeing hits 20% upper limit as board okays Rs 5200 cr land sale deal

The average trading volumes on the counter jumped over five-fold today with combined 18.96 million equity shares changing hands on the NSE and BSE till 09:24 AM.

Shares of Bombay Dyeing and Manufacturing Company (BDMC) hit a 52-week high of Rs 168.50, as they zoomed 20 per cent on the BSE in Thursday’s intra-day trade on the back of heavy volumes after the company’s board approved the proposal to sell the land parcel of about 22 acres in Worli, Mumbai to Goisu Realty Private Limited (a subsidiary of Sumitomo Realty & Development Company Limited) in 2 phases, for a total consideration of around Rs 5,200 crore.

With a view to deleverage and strengthen the Balance sheet of the company for funding future real estate projects, the board decided to monetize BDMC’s land parcel at Worli, Mumbai, after evaluating various other options, the company said.

BDMC will receive about Rs 4,675 crore in Phase-I. The balance amount of about Rs 525 crore will be received upon completion of certain conditions by BDMC and execution & consummation of the definitive agreements thereto for Phase- II.

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. The company will report a strong positive net worth and extinguish all its borrowings thereby saving interest costs and releasing the charge on encumbered assets.

The company further said it will pay dividend in future and have a strong Treasury balance to fund the future realty projects.

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

At 09:24 AM; BDMC was quoting 18 per cent higher at Rs 165.45, as compared to 0.35 per cent rise in the S&P BSE Sensex. The average trading volumes on the counter jumped over five-fold today. A combined 18.96 million equity shares changed hands on the NSE and BSE.