Wadias to up stake in Bombay Dyeing

Bombay Dyeing, a textile major which has forayed into real estate as well, has approved the preferential issue of warrants to its promoters, the Wadia family.

Warrants are securities that are issued by companies, allowing the holder the right to purchase a certain amount of shares at a stated price in a specified time-frame.

The company has issued 3.9 million warrants. Of this, 1.9 million warrants will have the option to subscribe to equivalent number of equity shares of Rs 10 each. The Wadias would be able to exercise this option in one or more tranches till March 31, 2011, subject to such allotment of equity shares not exceeding 5 per cent of the existing paid-up capital.

Further, the other 2 million warrants, which will also have the option to subscribe to an equivalent number of equity shares of Rs 10 each, can be exercised after March 31, 2011, but not later than 18 months from the date of issue of the warrants.

Industry analysts say the promoters see value in the land bank the company has. The promoters own 50 acres in Mumbai.

The relevant date for determining the issue price is February 21, 2010. The promoter group currently holds 47.09 per cent stake in the company.

The company’s shares have continuously been beaten since the start of this week. On the Bombay Stock Exchange, the company’s shares closed on Wednesday at Rs 518.90, down 1.93 per cent.