Equity research on Amar Dye Chem Limited; The ICFAI-Securities Research Centre

Abstract

Amar dye chem is one of the pioneer companies in dyechem industry in India. It-has one of the most’ integrated factory in this industry segment. The company has a very solid inhouse R&D base, with emphasis on indigenisation of technology. It has many product patents to its credit. The company is traditionally known for its quality and has created a strong brand name. It also has 2 good export performance, with 38 to 40% of its sales being exported. Though the company was market leader and was highly profitable up to 1970’s, its fortune turned with the triple impact of the entry of low cost Small Scale Sector, in.1975, the textile strike in Bombay in 1981 and industrial dispute in the company almost at the same time. The situation so deteriorated that a lockout was declared in the Shahad plant. It continued for thirty -months: The reopening was once again delayed by the delay. in. disbursement of loans from financial institutions and discontinuation of power supply by HSEB for non-payment of dues. The closure effectively wiped the entire net-worth of the company. The company was declared a sick unit in September 1987. A BIFR settlement was awarded on 11th June, 1993 and a majority stake was taken over by the R.S.Mardia group.