Raymond hits record high after board OKs to demerge real estate biz

Raymond surged 17.55% to Rs 3,458.25 after the company's board approved the vertical demerger of its Real Estate business into its wholly owned subsidiary, Raymond Realty (RRL).

According to the scheme of arrangement, each Raymond (RL) shareholder will receive 1 share of RRL for every 1 share held in Raymond and the new entity will seek automatic listing on stock exchanges.

Raymond Realty has around 100 acres of land in Thane with approximately 11.4 mn 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. The Raymond's Real Estate Business has reported revenue of Rs 1,593 crore (43% YoY growth) and EBITDA of Rs 370 crore in FY24.

 

The demerger aligns with Raymond Group's stated objectives of simplifying its corporate structure and enhancing shareholder value for operational and structural benefits. Leveraging Raymond's institutional strength, the move will allow for independent, dedicated management teams with industry-specific expertise to sharpen business focus and tailor investment strategies to each sector's unique dynamics.

Upon completion of this demerger, Raymond and Raymond Realty (RRL) will operate as separate listed entities within the Raymond Group post all statutory approvals.

Gautam Hari Singhania, chairman & managing director, Raymond, said; Having stated that now we have clear three vectors of growth at Raymond group i.e. Lifestyle, Real Estate and Engineering, this corporate action is in line with creating shareholder value creation. This strategy to demerge the Real Estate business into a separate company that will be listed through automatic route is another step to enhance the shareholder value. The existing shareholders of Raymond will get the shares in the new listed Real Estate company in a ratio of 1:1.

Raymond is a leading manufacturer of worsted suiting fabrics and garments in India. It also has a presence in precision engineering products and real estate.

The company reported 18% jump in consolidated net profit to Rs 229 crore in Q4 FY24 as compared with Rs 194 crore posted in Q4 FY23. Revenue from operations increased 21.32% to Rs 2,608.50 crore during the quarter as compared with Rs 2,150.18 crore in corresponding quarter last year.

The counter hit an all-time high at Rs 3,484 in intraday today.

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