After Go First trouble, CARE ratings raises concerns over Wadia's Bombay Dyeing debt repayment

CARE ratings has raised concerns over Wadia group's Bombay Dyeing's ability to pay the debt during fiscal years 2024 and 2025. This comes, after the Wadia group's air line Go First filed for a voluntary insolvency proceedings.

Between FY24 and FY25, Bombay Dyeing & Manufacturing Company has got debt repayment of Rs 3,597 crore. The credit rating agency has raised concerns regarding the repayment due to the delay in raising Rs 940 crore through rights issues and asset monetisation.

The agency has slashed its ratings on Bombay Dyeing's long-term bank financing to BBB- and has revised its outlook to Negative. Bombay Dyeing's consolidated net loss in the March 2023 quarter increased to Rs 246.1 crore from a net loss of Rs 41.74 crore during the same period last year.

As per CARE ratings, in FY24 the repayment can be tightly matched with the expected cash flow and the available liquidity. However, for FY25, the company has to refinance the repayment in case the company fails to raise funds through rights issue and asset monetisation.