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Bombay Dyeing, the textile arm of Nusli Wadia Group, plans to halve its Rs 1,200 crore debt in next two years from cash accruals and developing two 60-storied residential towers at Dadar in Mumbai.
The company will utilise less than one-fourth of the 40-acre vacant plot made available by moving out its mill from heart of the city.
Mr Durgesh Mehta, Joint Managing Director, Bombay Dyeing, said the company is waiting for final approval from the authorities concerned for launching the Dadar project, which would entail an investment of Rs 600 crore.
Dadar Project
“Our cost is comparatively lower as the land already belongs to us. We would meet the construction expenses by progressively selling the built-up area. We are waiting for occupancy certificate to be issued by the authorities for residential tower completed recently at our land in Dadar and intend to sell three to four lakh square feet this fiscal,” he said.
Last year, Bombay Dyeing sold about four lakh square feet of office space to Axis Bank in Worli, Mumbai, for Rs 782 crore. The deal translates to about Rs 16,000 a square foot.
The company had utilised one acre of land for the Axis Bank building and holds another 24 acre for further development.
Realty revenues
“It is very difficult to value the land parcel we hold in Worli and Dadar as it depends on whether we want to go for construction of a residential apartment or office space and the floor space index (FSI) approved. Besides, the realty prices keep fluctuating. However, conservative estimate values the land at Rs 5,000-6,000 crore,” said Mr Mehta.
Polyester unit
The company's revenue from the real estate business is expected to increase significantly from Rs 100 crore registered last fiscal.
Given the uptick in the textile sector and cotton prices, the company has shelved its plan to sell off the polyester in Pune. Polyester and cotton prices move in tandem.
“Our polyester unit has been working at a capacity utilisation of 95 per cent and recorded an EBIT of Rs 100 crore in March quarter,” said Mr Mehta.
The company expects cotton prices to remain stable at the current level with expectation of good crop this year globally. Prices have already fallen by 25 per cent in last few months following weak global demand and improvement in output.
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