| Bombay Dyeing operating chief executive Aloke Banerjee in Calcutta on Wednesday. Picture by Kishor Roy Chowdhury
Calcutta, Jan. 15: One of the country’s oldest producer of textiles, Bombay Dyeing and Manufacturing Company Ltd, is planning to forge a strategic alliance with a leading multinational brand.
An announcement to this effect is expected at the annual general meeting of the company. “We may even have to hold an extraordinary general meeting,” a senior official said.
Aloke Banerjee, operating chief executive of the company, said: “We have a network of 540 distributors across the country, besides a very strong brand. We can leverage them to forge an alliance with a global brand.”
A large number of international brands, the likes of Givenchy and Gucci, are waiting to enter India. Banerjee indicated Bombay Dyeing could tie up with one of them.
Such an alliance could even lead to co-branding and divestment of equity stake. Banerjee, however, clarified that nothing had been finalised yet.
“Such ideas have crossed our minds, but honestly, we haven’t even started talking to potential partners,” he said.
Banerjee was formerly with Britannia, another company from the same stable. He started working for Bombay Dyeing early last year, when the company initiated its financial restructuring.
As the company gears up for the alliance, the promoters — Nusli Wadia and his family — are raising their stake by way of buyback of shares. Wadia now holds 42.39 per cent in the company.
“The fact that the promoters are increasing their stake in the company indicates they are bullish on the business and expects quantum jump in profitability,” Banerjee said.
Bombay Dyeing had posted a net loss of Rs 2.9 crore in the last fiscal, but the management says it is going to turn the corner this year. The company expects to post a 15 to 20 per cent growth in its textile business this year.
Commentators say the promoters are tightening their grip on the company in anticipation of the strategic alliance that could lead to divestment of equity stake in the company.
Banerjee said infusion of fresh capital would help though the company had quite a lot of cash in it coffers. “In this business, you always need funds. Every showroom costs in crores,” he explained.
The company has cleaned up its balancesheet and reduced flab in recent times. Bombay Dyeing provided for diminution in value of its investments, and retired a number of employees through a separation scheme.
Experts say the textile industry in the country is in a fair amount of difficulty. “The industry is witnessing consolidation. A number of leading brands and companies have changed hands in recent times,” an analyst said citing Raymond’s acquisition of Color Plus, and Grasim’s takeover of Madura Garments.