Bombay Dyeing chairman Nusli Wadia in Mumbai on Wednesday. (PTI)

Mumbai, July 25: The Wadias are raising their stake in Bombay Dyeing & Manufacturing Company through an issue of preferential warrants.

The board of Bombay Dyeing today approved a proposal for the issue of 19.30 lakh warrants to promoters that would be converted into shares within 18 months of issue.

Promoters hold around 43 per cent in Bombay Dyeing. The stake is held both individually and through various entities of the group. It is expected that the conversion will see promoters’ stake going up to 48 per cent. However, Bombay Dyeing has not revealed the price at which these warrants are being issued.

Bombay Dyeing today informed stock exchanges that the preferential issue would entitle the warrant holders — any time within 18 months from the date of issue — to apply in one or more tranches for an equivalent number of equity shares of the company.

These equity shares will not exceed 5 per cent of the then existing paid-up equity share capital of the company. It added that pricing of the issue would be in accordance with the Sebi guidelines for preferential issues.

The Wadias are not the only ones in recent times to raise their stake in a listed entity.

While the Tatas have been steadily increasing their shareholding in various group companies, recent reports say that even Kumar Mangalam Birla is planning to increase his stake in Hindalco Industries to ward off any hostile takeover attempt.

In the past, the Wadias had taken measures to increase their stake in Bombay Dyeing. A few years back, the company (along with group company Britannia Industries) had announced a buyback programme. In 2000, the Calcutta-based jute baron Arun Bajoria acquired over 5 per cent in Bombay Dyeing, sparking speculation that he was planning a hostile bid.