Shares of India's Bombay Dyeing surge on $627 mln land sale; peers, realty index up (updated)
14/09/2023 07:31
(Adds details of stock movement and company statement)
BENGALURU, Sept 14 (Reuters) - Shares of
realty-to-textile firm Bombay Dyeing and Manufacturing BDYN.NS
jumped as much as 20% on Thursday on a $627 million deal to sell
land, pushing up peers' stocks on hopes of a pickup in the
realty market.
The sale of the 22-acre land in Mumbai to a unit of Japan's
Sumitomo Realty and Development Co 8830.T would help the
company become debt-free, and comes as parent Wadia group faces
troubles with its Go First airline filing for bankruptcy in May.
Bombay Dyeing's stock hit its highest level since Sept. 27,
2018.
The deal, announced on Wednesday, signals investor optimism
while the location of the land parcel presents immense
development prospects, said Shishir Baijal, Chairman and
Managing Director of Knight Frank India.
Shares of Godrej Properties GODR.NS , Indiabulls Real
Estate INRL.NS and Oberoi Realty OEBO.NS are up between 1.6%
and 2.6%, driving the Nifty Realty index .NIFTYREAL up 1.6%.
Also helping sentiment was U.S. data showing a moderate
increase in consumer prices in August, which cemented
expectations that the Federal Reserve will leave interest rates
unchanged in September.
The sale will help Bombay Dyeing record a pre-tax profit of
more than 43 billion rupees ($518.24 million), and help
"extinguish all its borrowings," the Mumbai-based company noted
in an exchange filing.
Bombay Dyeing shares were last up 15.9%. It has more than
doubled so far this year, compared to a nearly 37% climb in the
Nifty Realty index.
($1 = 82.9725 Indian rupees)
(Reporting by Varun Vyas in Bengaluru; Editing by Mrigank
Dhaniwala and Janane Venkatraman)
((varunvyas.hebbalalu@thomsonreuters.com;))