Bombay Dyeing aiming to half its debt

Bombay Dyeing, the textile arm of Nusli Wadia Group,

is aiming to halve its Rs 1,200 crore debt in the next two years from cash accruals. Also on the agenda is development of two 60-storied residential towers at Dadar in Mumbai. Durgesh Mehta, Joint Managing Director, Bombay Dyeing says the company will utilize less than one-fourth of the 40-acre vacant plot made available by moving out its mill from heart of the city. As of now they are waiting for final approval from the authorities for launching the Dadar project, which would entail an investment of Rs 600 crores.

It may be noted that last year, Bombay Dyeing had sold about 4 lakh sq. ft. of office space to Axis Bank in Worli, Mumbai, for Rs 782 crores. The deal translates to about Rs 16,000 a sq. ft. The company had utilised one acre of land for the Axis Bank building and holds another 24 acres for further development. Bombay Dyeing’s revenue from the real estate business is expected to increase significantly from Rs 100 crores registered last fiscal. Given the swings in the textile sector and cotton prices, the company has shelved its plan to sell off the polyester unit in Pune. Polyester and cotton prices move in tandem. Mehta says their polyester unit has been working at a capacity utilization of 95 per cent and recorded an EBIT of Rs 100 crores in March quarter. The company expects cotton prices to remain stable at the current level with expectation of good crop this year globally. It may be noted that prices of cotton have already fallen by 25 per cent in the last few months following weak global demand and improvement in output.