Bombay Dyeing and Manufacturing Company recently 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. The company 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 .
According to the company’s FY18 annual report, Bombay Dyeing’s total debt rose 17 per cent annually to Rs 2,730 crore between FY13 and FY18, while its revenue grew just 1.5 per cent in the same period..
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.