Bombay Dyeing to issue warrants

Bombay Dyeing, one of the oldest textile and apparel manufacturers in India, owned by

the Wadia family is considering raising its stake through a preferential issue of warrants. In a communiqué to the Bombay Stock Exchange, Bombay Dyeing announced its board meeting to approve a proposal for the issue of warrants. It may be noted that apart from textiles, the company also manufactures the lifestyle brand Vivaldi.

The company, which also owns vast tracts of land in Mumbai, did not specify how many shares will be issued to the promoters which holds 47.11 per cent in the company. They intend to infuse money into the company to retire debts and develop real estate.

Also, Bombay Dyeing is close to signing a property deal with Axis Bank to build the bank’s new headquarters at its sprawling mill compound. The Wadias own 50 acres in Central Mumbai and these properties are under various stages of commercial development.

After two quarters of losses and a dismal 2008-09, which ended with a loss of Rs 192 crores, the company reported a net profit of Rs 2.7 crores in the quarter ended December 31, 2009. An improvement in the operating profit in the past four quarters seems to have been driven by the real estate business, which has helped to offset the losses in the firms’ struggling textile and polyester division.