Raymond shares skyrocketed to a record high on July 5, following the board’s approval of the demerger of its real estate business, Raymond Realty. The stock surged 18.5 percent to hit an all-time high of Rs 3,484 on the National Stock Exchange (NSE). At 11.02 am, shares of Raymond were trading at Rs 3,392.45.
Demerger Plan to Consolidate Real Estate Business
The demerger plan aims to consolidate the conglomerate’s entire real estate business into a single entity to leverage growth opportunities and attract new investors and strategic partners. Under the demerger plan, Raymond will issue 6.65 crore shares of Raymond Realty with a face value of Rs 10 per share. Shareholders of Raymond will receive one share of Raymond Realty for each share held, with no cash or alternative considerations involved.
Raymond Realty to List on NSE and BSE as Separate Entity
After completion, Raymond Realty will be listed on both the NSE and BSE as a separate entity. The company stated in an exchange filing that the strategic move comes as Raymond’s Real Estate Business has achieved scale, reporting revenue of Rs 1,593 crore (43 percent on year growth) and EBITDA of Rs 370 crore in FY24. The real estate business is well-positioned to chart its own growth path as a separate entity.
Raymond Realty’s Land Bank Potential
Raymond Realty has 100 acres of land in Thane with 11.4 million sq ft RERA approved carpet area, of which about 40 acres is currently under development. There are five ongoing projects worth Rs 9,000 crore on its Thane land, with an additional potential to generate more than Rs 16,000 crore, making a total potential revenue of over Rs 25,000 crore from this land bank.
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Last Year’s Demerger of Lifestyle Business
Last year, Raymond had demerged its lifestyle business to Raymond’s Consumer Care in an effort to become debt-free. The lifestyle business consisted of the suiting business with manufacturing plants, B2C shirting, branded apparel, and subsidiaries including garmenting business and B2B shirting.
Conclusion
The demerger of Raymond’s real estate business is a strategic move to unlock growth opportunities and attract new investors and strategic partners. The real estate business has achieved scale, reporting impressive revenue and EBITDA growth. The land bank potential of Raymond Realty offers significant revenue-generating opportunities. The demerger plan is expected to create value for shareholders in the long run.
