Banking on SC verdict mill shares move forward

Investors who bet on the shares of textile mills and mill land developers became richer on Tuesday. With the SC verdict going in favour of d...

Investors who bet on the shares of textile mills and mill land developers became richer on Tuesday. With the SC verdict going in favour of development of mill land, Bulls 8212; hoping for more foreign direct investments to flow in 8212; sent all old textile mill shares to new peaks.

Bombay Dyeing 8212; which is planning to develop its land 8212; shot up by 20 per cent. Century Textiles soared by 7.98 per cent as compared to its yesterday8217;s close. Morarji Realtors saw its stock jumping by 15 per cent. Others like Ruby Mills, Swan Mills and Phoenix Mills also moved up even as the Sensex lost 10 points at 10,725.67.

8216;8216;Foreign investors are very happy with this decision,8217;8217; said Indiabulls executive director Gagan Banga. 8216;8216;FDI will now flow into the real estate sector,8217;8217; he added.

8216;8216;Textile companies are sitting on huge land reserves. Companies like Bombay Dyeing will gain from this decision. However, the jump today in textile stocks is a kneejerk reaction to SC decision and fundamentally it cannot be explained,8217;8217; India Infoline8217;s head of research Toral Munshi said.

Bombay Dyeing is developing its 2.5 lakh square feet Spring Mill property in Parel. The 100-year old textile mill was set up by Wadia group founder Nowrosjee Wadia and is non-operational after around 1,750 employees of the firm accepted a one-time voluntary retirement scheme last year.

Other textile mills in the vicinity including Century Textiles and Dawn Mills will now see a transformation from old crumbling buildings to glass and steel commercial towers.

8216;8216;Generally we are bullish on the prospects of the textile sector however this decision is not going to impact the sector in the long run. After all how many textile mills have surplus land in Mumbai?8217;8217; Angel Broking analyst Sejal Doshi said.

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Last week, Morgan Stanley8217;s real estate investment arm has invested about 68 million in Bangalore8217;s property developer Mantri Developers in its first foray into the fast-growing real estate sector.

As per GoI rules, foreigners are allowed to invest in any property which is 10 acres or more.

With today8217;s judgement, many foreign moneybags will invest in Mumbai and in India. It will also spark interest from several US funds and firms eager to tap a booming economy where a growing middle class demands new homes, shops and offices.

But many investors have been hesitant, wanting to see others test India8217;s legendary red tape before they take the plunge.

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Indian firms like Indiabulls are keen for foreign partnerships because they want finance and expertise to expand from their regional bases and become national players.