Bombay Dyeing Sells 22-Acre Plot to Sumitomo for Rs 5,200 Cr
The Wadias-run Bombay Dyeing announced the sale of a 22-acre property piece to Japan’s Sumitomo on Wednesday in one of the largest land purchases in the financial capital for a price of Rs 5,200 crore.
The Wadia International Centre, the headquarters of the almost three-century-old organisation, and other buildings are located on the Worli site in the heart of Mumbai.
According to him, the Bombay Dyeing board decided in March 2022 to improve financial sheets in order to make the firm more debt-efficient, bring it into the black, and put it on the path to continuous profitability.
The firm would receive the funds in two instalments, with the first payment of Rs 4,675 crore expected by October and the remaining Rs 525 crore arriving by March 2024 upon the achievement of specific goals, according to Anand. The company, which recorded a widening of losses to Rs 517 crore in FY23, will receive the money in two phases.
The Worli property tract, which is currently being sold to Sumitomo, once housed actor Shilpa Shetty’s Bastian Restaurant in addition to the WIC. It once housed the Hard Rock Cafe as well. It’s interesting to note that while Bastian has closed down recently, the Wadia group’s administrative offices have moved to a different building owned by the same company in Dadar.
According to reports, Bombay Dyeing had previously considered a plan to develop the 22-acre land on its own and planned a mixed-use development there.
The Wadia Group was founded in 1736 and has its origins in shipbuilding. In addition to running a number of other businesses, it also owns the Britannia brand of biscuits.
Bombay Burmah, a corporation that makes tea, Go First, a grounded airline, and Bombay Dyeing, a company with textile industry heritage.
On Wednesday, the company’s stock rose 6.93% to end at Rs 140.45 a share on the BSE, outpacing gains of 0.37% for the benchmark.
A Milestone in Indian Real Estate as Bombay Dyeing Divests Prime Land to Japanese Giant Sumitomo
Bombay Dyeing, the textile arm of the Wadia Group, has recently announced the sale of a 22-acre land parcel in Mumbai for Rs 5,200 crore to Sumitomo Corporation of Japan. This marks a significant milestone in the Indian real estate landscape, presenting various opportunities and implications for the market, the city, and both companies involved.
Founded in 1879, Bombay Dyeing has been a household name in India for textiles and has later diversified into real estate. Over the years, the company has built a strong brand image and gained a vast consumer base. Its foray into real estate, however, has had its ups and downs. With this deal, Bombay Dyeing aims to capitalize on one of its high-value assets to drive its overall strategy.
Sumitomo Corporation is a leading Fortune Global 500 company with diversified business interests, including real estate. The conglomerate has a solid footing in the real estate markets of various countries, and this acquisition marks its increased interest in the Indian market, particularly in Mumbai, which is often considered the financial capital of India.
The 22-acre plot situated in the heart of Mumbai is a prime piece of real estate, and its value reflects the burgeoning demand for land in the densely populated city. Bombay Dyeing and Sumitomo Corporation have both confirmed the transaction, making it one of the largest real estate deals in India to date. The payment structure and timelines are yet to be publicly disclosed.
The deal will provide a robust cash inflow for Bombay Dyeing, enabling the company to reduce debts, invest in its core business, or diversify its portfolio further.This acquisition will serve as a strategic inroad for Sumitomo Corporation into the Indian real estate market, signaling its long-term investment plans in the country.
This massive real estate transaction will undoubtedly contribute to the overall economic sentiment of Mumbai and could lead to potential employment opportunities depending on what Sumitomo intends to develop on the acquired land.The deal sets a new benchmark for valuing prime real estate in Mumbai and potentially in India as a whole, likely driving up land values in comparable areas.
The sale might prompt Bombay Dyeing to focus more on its core competencies or to reinvest the generated funds in lucrative sectors.With this significant purchase, Sumitomo might plan to develop a landmark project in Mumbai, such as a residential or commercial complex, which can further enhance its reputation in India.
The Rs 5,200 crore deal between Bombay Dyeing and Sumitomo Corporation is a landmark in India’s real estate history. It symbolizes the increasing international interest in India’s real estate market while offering an exciting opportunity for both companies to achieve their strategic objectives. This transaction is bound to have far-reaching effects on the real estate market, both in Mumbai and across India, and it will be interesting to see how it shapes the future of the sector.
