Crisil has downgraded its rating for the Rs. 83-crore non-convertible debenture issue and Rs.17.2 crore secured premium notes issue of The Bombay Dyeing and Manufacturing Company Ltd from ‘AA’ to ‘A+’. It has, however, reaffirmed its ‘P1+’ rating assigned to the company's Rs. 200-crore commercial paper programme.

The revision in long term ratings factor in the continued weak performance of Bombay Dyeing's textiles operations primarily on account of an unfavourable cost structure, volatility in profitability of the DMT (di-methyl terephthalate) division, high degree of competition in the textiles and DMT business, and low level of profitability. The ratings are supported by the company’s strong market position in the textiles business (primarily in the home furnishings segment), established retail distribution network, and significant financial flexibility arising out of the large liquid assets available with the company.

Bombay Dyeing is engaged in the manufacture and sale of cotton and blended fabrics (shirtings, suitings, apparel, home furnishings, ready-made garments, and industrial fabrics) and DMT. During the year 1998-99, the textile division contributed around 62% of the company's total turnover (of Rs. 8.6 billion), with the balance being contributed by the company’s DMT operations.