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Bombay Dyeing puts IT foray plan in cold storage

Reeba Zachariah

Bombay Dyeing & Manufacturing Company has shelved its plans to foray into information technology.

At the company's annual general meeting held on Monday, Nusli Wadia, chairman of Bombay Dyeing said, "We have no plans to enter the infotech business." Only last year at the company's AGM, Wadia had said the company has decided to enter the infotech business. "However, the nature of the business is yet to be decided and negotiations are underway with a few companies," Wadia had then stated.

According to sources, although the earlier plan was to enter into software development, possibly the current slowdown in the sector could be one of the reasons for the change in plan.

As part of the company's plans to restructure its textile business, Bombay Dyeing has decided to shift its operations from Bombay to some major locations in Maharashtra. Wadia said, "We will be moving our textile operations from Bombay and this will be done in a phased manner and will take about 2-5 years." The company will also be sourcing fabrics from countries such as China.

The company has received approval from the Maharashtra government to develop the mill land. Senior company officials said, "The land will be developed either for residential or commercial purpose since both the options are available. On the commercial front, the company is largely looking at developing software technology parks. However, a final decision is yet to be taken."

The shareholders of Bombay Dyeing have approved the company's buyback proposal to acquire up to 25 per cent of its total paid-up equity capital. The total equity capital of the company is around Rs 410 million.

The company intends to buy back a maximum of 10 million equity shares of Rs 10 each at a price not exceeding Rs 60 a share. At the annual general meeting, however, some shareholders argued that the buy back price of Rs 60 was not attractive.

Wadia said, "The main reason for the buyback is that the management feels that the value of Bombay Dyeing shares is low."

"Our main aim is not to increase our stake. We hold above 40 per cent in the company. The proposed buyback gives us an opportunity to invest surplus resources in our own shares," Wadia said.

The company will sport a new corporate identity and logo to be designed by Paris-based Shombit Sengupta. The Bombay Dyeing brand could also be extended to readymades. Shombit will work on designing and packaging of its retail shops as well. The entire scheme will be implemented by June-July next year.

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