Bombay Dyeing has received a credit rating outlook revision from CRISIL Ratings Limited on January 2, with the agency changing its outlook to 'Stable' from 'Positive' while maintaining the existing rating levels. The rating action affects the company's total bank loan facilities of ₹501.00 crores and fixed deposits of ₹0.30 crores.

Rating Action Details

CRISIL Ratings has taken the following rating actions for Bombay Dyeing:

Rationale for Outlook Revision

The revision in outlook reflects the moderation in polyester staple fibre (PSF) segment's operating profitability in H1 of fiscal 2026. This decline is primarily attributed to lower sales from the higher margin export market, particularly to the USA. The company's export business reduced from 34.00% to 16.00% in H1 fiscal 2026 due to US tariffs, which has impacted margins significantly.

While the company is focusing on improvement in operating margins through cost efficiency measures to save power costs and improve realizations through value addition, the increase in export business will be critical for profitability improvement. Sustenance of scale and improvement of margins from the PSF segment will remain key monitoring factors.

Financial Strength and Liquidity

Despite the operational challenges, Bombay Dyeing maintains a strong financial profile with several key strengths:

The company received proceeds from the sale of its land parcel at Worli in fiscal 2024, totaling approximately ₹4,686.00 crores in the first tranche (October 2023) and ₹538.00 crores in the second tranche (August 2024). This transaction significantly strengthened the company's financial position.

Business Diversification and Market Position

Bombay Dyeing operates through three main business divisions: real estate, polyester staple fibre manufacturing, and retail. The company holds a significant market share of more than 10.00% in the PSF segment, catering to diverse industries including apparel, home textiles, automobiles, geotextiles, hygiene products, and industrial products.

The real estate division has a healthy track record with completed projects including the Island City Centre (ICC) residential project and WIC Worli - Axis Bank HQ. The company plans to launch fresh real estate projects in Q4 FY 2026, with customer bookings and response being closely monitored.

Rating Sensitivity and Market Performance

CRISIL Ratings has identified several factors that could influence future rating actions. Upward factors include improvement in operating profitability above 2.00% in the PSF segment, timely launch of new projects with adequate customer bookings, and sustenance of financial risk profile. Downward factors include continued operating losses from the PSF segment and low cash flow from operations due to subdued response to upcoming projects.

On January 2, shares of Bombay Dyeing ended at ₹129.50, down by ₹2.76, or 2.09%. The company faces ongoing legal challenges, including a SEBI fine of ₹2.25 crores and market ban, currently under appeal at SAT. Additionally, there are unacknowledged GST and other claims of approximately ₹889.00 crores under legal appeal.

Bombay Dyeing and Manufacturing Company Limited has received a significant GST demand order from Maharashtra State authorities, totaling ₹43.61 crores for financial year 2021-22. The company disclosed this development through a regulatory filing under SEBI's listing regulations on December 31, 2025.

GST Order Details

The order was issued by The Deputy Commissioner of Maharashtra State Goods and Services Tax (MUMBAI-NOD-E-1105), Ghatkopar West, Mumbai. The company received this order via system-generated email on December 30, 2025.

Nature of Alleged Violations

The GST order under Section 73 of the CGST/MGST Act 2017 pertains to specific compliance issues identified by the tax authorities:

• High value credit notes shown in GSTR 1 returns
• Negligible inward E-way bills corresponding to these credit notes
• Turnover reconciliation discrepancies in GSTR 9C-7G

The order follows Rule 142 of the Maharashtra Goods & Services Tax Rules, 2017, and addresses alleged contraventions for the financial year 2021-22.

Company's Response and Impact

Bombay Dyeing has indicated that beyond the financial impact mentioned in the order, the GST demand has not affected the company's operations or other business activities. The textile manufacturer plans to take necessary actions to address the matter.

Legal Recourse

The company has stated it will exercise legal remedies available under the GST Act to contest the demand. This typically includes options such as filing appeals before appropriate appellate authorities or seeking stay on the demand during the appeal process.

The disclosure was made in compliance with Regulation 30 of SEBI's Listing Obligations and Disclosure Requirements (LODR) Regulations 2015, ensuring transparency with stakeholders regarding material developments affecting the company.