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Mumbai: Bombay Dyeing and Manufacturing company has said that it is likely to start pre-payment of its debt from the current fiscal year as cash flows begin to kick in from the realty business, Vishu Peruvemba, chief financial officer said.
The firm was responding to a report in TheIndianSubcontinent on November 29, which said Bombay Dyeing figured in the list of 77 companies with elevated default risk probability as computed by Bloomberg.
One-year default risk probability stood at 3.4 per cent for Bombay Dyeing, according to Bloomberg.
“We are expecting pre-payment of more than Rs 500 crore from two towers in the Mumbai as we start booking revenues from sales of two towers in the Mumbai in the current fiscal year and plans to become debt free in the next two-three years,” he added.
Bombay Dyeing’s total debt rose 17 per cent annually to Rs 2,730 crore between FY13 and FY18, according to the company’s FY18 annual report, while revenue grew just 1.5 per cent in the same period.
“Our debt level has increased in the past five years as we took conscious decision to increase debt funding as it raised at a much attractive price compared with the cost of equity,” said Peruvemba.
The company’s debt to equity increased to 3.5 in FY18 compared with 0.33 in FY13.
The company is having a liquid investment worth Rs 1,200 crore in the balance sheet at end September 2018, mainly derived from the value of investment in Bombay Burmah Trading Corporation.
