Bombay Dyeing and Manufacturing Company Limited (BDMC), a subsidiary of the Wadia Group, has agreed to sell a substantial 22-acre land in Worli, Mumbai, to Goisu Realty Pvt. Ltd., a subsidiary of Sumitomo Realty & Development Company Limited, in a landmark land deal valued at Rs 5,200 crore. This transaction represents one of the most significant land deals in Mumbai's real estate history and serves as a strategic move for BDMC.
The company's board of directors has given its approval for the sale, which will take place in two phases, pending shareholder approval. In the first phase, BDMC will receive approximately ₹4,675 crore, while the remaining ₹525 crore will be disbursed upon the fulfilment of certain conditions and the finalization of agreements for Phase II.
The primary objective behind this sale is to bolster BDMC's financial position by reducing debt and fortifying its balance sheet. These funds will be used to finance future real estate ventures. Nusli Wadia, Chairman of the Wadia Group, expressed his satisfaction with the deal.
In addition to the land sale, BDMC's board has granted in-principle approval for the development of currently unused land owned by the company. These lands have the potential to accommodate approximately 3.5 million square feet of residential and commercial properties, with an estimated revenue potential of Rs 15,000 crore over the coming years. The development will be carried out in phases to optimize cash flows efficiently. BDMC is also open to exploring joint development and partnership opportunities to ensure a steady stream of future revenue and profits.
Upon the completion of this transaction, BDMC anticipates recording a pre-tax profit exceeding Rs 4,300 crore. The company will be able to eliminate all its borrowings, leading to interest cost savings and the release of encumbered assets. This strategic move positions BDMC for a more financially secure future and the possibility of offering dividends to shareholders.
Following the announcement, BDMC's shares saw a substantial increase, closing 6.93% higher at ₹140.50 apiece on the stock exchange. This significant land sale is expected to have a lasting impact on the company's financial health and future growth prospects.
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