Shares of Bombay Dyeing & Manufacturing Company were skyrocketing over 18% early on Thursday after the firm said it would sell a piece of land in Mumbai at a profit to a Japanese firm.
What Happened: Bombay Dyeing has approved the sale of a 22-acre land parcel in Mumbai’s Worli area, along with its floor space index (FSI), to Goisu Realty Private, a unit of Japan’s Sumitomo Realty & Development Company. The deal will occur in two phases and is worth a total of ₹5,200 crore.
If Bombay Dyeing’s shareholders approve the transaction, the company will receive around ₹4,675 crore for phase-I of the sale and the remaining ₹525 crore upon meeting specific conditions for phase-II.
Nusli Wadia, Bombay Dyeing Chairman, said the deal was expected to yield a pre-tax profit exceeding ₹4,300 crore, bolster financial stability, reduce interest costs by eliminating debt and release encumbered assets.
In March 2022, Bombay Dyeing’s board of directors settled on a strategy to focus on real estate for future growth, the company said in a statement. This entails accelerating flat sales at Island City Centre (ICC), Dadar, and leveraging land banks.
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The board has also tentatively approved developing unused land parcels, potentially creating 3.5 million square feet of residential and commercial properties, with a revenue potential of ₹15,000 crore in the coming years.
Price Action: Bombay Dyeing’s share price shot up 18.15% to ₹166 at the start of trade on Thursday.
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