Textile mill shares spinning a bull run

‘‘The market is factoring in the windfall profit which will accrue to textile mills as the sale/development of mill land has come to the final stage. Even though there’s no land sale in some cases, the issue has created a bullish sentiment,” said a BSE dealer. Some of these companies are set to make a huge money in land sale and redevelopment.

Dawn Mills is another classic example. Its share price shot up by 202 per cent to Rs 2,615 from Rs 865 within six months. Others, like Swan Mills and Ruby Mills, also shot up on the exchanges. Simplex Mills soared by 553 per cent from Rs 41 to Rs 268 in six months.

Investor wealth in textile mills has shot up steeply. Market capitalisation — total market value of listed shares — of ten mills soared by Rs 1,118 crore to Rs 2,354 crore in the last six months.

Bombay Dyeing, a big land owner in Mumbai, shot up by 147 per cent from Rs 128 on June 24, 2004 to Rs 316.30 by Friday. Modern Mills, which was quoting Rs 10 a year ago, is now worth Rs 70, a rise of 681 per cent.

‘‘The rise was faster than the Sensex or the general market.

Some of the mill shares which shot up don’t really own any land in Mumbai or any other city but the general bullishness in the sector buoyed them as well,’’ said stock broker Pawan Dharnidharka of Nangalia & Sons.

Some of these companies were making losses and some were generating revenue from other businesses.

Phoenix Mills has made a sales turnover of only Rs 1.74 crore for the year-ended March 2005 but its other income was around Rs 41.4 crore. As a result, it made a profit of Rs 13.4 crore.