Astral

Baroda Rayon Corporation Ltd is a diversified company with its business interests in textiles and real estate sectors. The company was initially engaged in manufacturing of viscose filament rayon yarn, sulfuric acid, carbon di-sulphide, anhydrous sodium sulphate and nylon yarn. Later it diversified into the real estate sector as well. The company, incorporated in May 1958, was founded by Sangramsinh Gaekwad, who belonged to the royal family of the erstwhile princely state of Baroda.

The Company acquired Gujarat Polyamides in 1973. Their nylon yarn plant along with a collaboration agreement with Snia Viscosa SPA of Italy came under the ownership of Baroda Rayon. Gujarat Polyamides was completely amalgamated from 1 Jan 1973. The company received a letter of intent from the Government to manufacture 1,700 tonnes of nylon tyre fabric per year in 1979. The Government approved Baroda Rayon’s application under Technical Development Fund for the recovery of Caprolactam from fresh water. To execute this project, the firm got into a partnership with Italviscosa Eastern Trading SPA Italy.

Baroda Rayon Corporation was listed on the stock exchanges in 1995. Baroda Rayon’s market capitalisation stood at ₹450 crore as of December 30, 2023. Baroda Rayon share price has gained nearly 38% in the last one year.

The company’s promoters own 67.53% stake, while the public and other financial institutions have 31.50% and 1% stake, respectively.

Baroda Rayon business operation

The company owns a manufacturing plant located in Udhna, Gujarat. However, the company is not engaged in any manufacturing and production activity. The entire operation of the company in the textile segment has stopped since 2008.

The company started looking for new sources of revenue. The management explored the possibilities of getting into the real estate segment to get a new revenue stream and thereby strengthen the finances of the company. In 2022-23, Baroda Rayon expanded its business into the real estate sector.

Currently, Baroda Rayon has been registered under BIFR (Board of Industrial and Financial restructuring). The process for financial restructuring was initiated as the company obtained a loan of ₹217.48 crore and did not make provision for interest on this loan in its books of accounts. This led to problems in terms of statutory compliance.

Financial highlights

• The company reported a total income of ₹83.62 crore in FY2023, a growth of 104.05% compared to ₹40.98 crore in the previous financial year.
• The company’s profit after tax (PAT) stood at ₹272.74 crore as against ₹374.58 crore in the preceding financial year.
• The company made a capital expenditure of ₹542.82 crore in FY23.
• Its earnings per share (EPS) for FY 2023 stood at ₹119.04 as against ₹163.49 in FY 2022