Each Raymond shareholder will receive 1 share of Raymond Realty for every 1 share held in Raymond.
Textile and real estate conglomerate Raymond Ltd has announced that its board has approved the demerger of its real estate business, Raymond Realty Limited. This move is aimed at unlocking the full potential of the business and attracting new investors and strategic partners.
According to a regulatory filing, Raymond will issue 6.65 crore shares of Raymond Realty, each with a face value of Rs 10. Shareholders will receive one Raymond Realty share for each Raymond share they hold, with no cash or other forms of consideration involved. Raymond Realty is set to be listed on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
"The proposed restructuring will enable focused management to explore potential business opportunities effectively and efficiently," said Raymond in a press release. This strategic demerger comes as Raymond's Real Estate Business has achieved significant scale, reporting revenue of Rs 1,593 crore (43% YoY growth) and an EBITDA of Rs 370 crore in FY24. Raymond Realty possesses 100 acres of land in Thane, with 11.4 million square feet of RERA-approved carpet area, of which about 40 acres are currently under development. The Thane land includes five ongoing projects valued at Rs 9,000 crore, with the potential to generate more than Rs 16,000 crore, making a total potential revenue of over Rs 25,000 crore from this land bank.
Raymond Realty recently launched its first joint development agreement (JDA) project in Bandra, Mumbai, and has signed three new JDAs in Mahim, Sion, and another in Bandra East, Mumbai. The combined revenue potential from these four JDA projects in the Mumbai Metropolitan Region is estimated to exceed Rs 7,000 crore. With the development of the Thane Land Bank and the current four JDAs, the company projects a potential revenue of Rs 32,000 crore.
Commenting on the development, Gautam Hari Singhania, Chairman and Managing Director of Raymond Limited, stated, "Having clear three vectors of growth at Raymond group i.e., Lifestyle, Real Estate, and Engineering, this corporate action aligns with our goal of creating shareholder value. The strategy to demerge the Real Estate business into a separate company, which will be listed through an automatic route, is another step towards enhancing shareholder value. The existing shareholders of Raymond Limited will receive shares in the newly listed Real Estate company in a ratio of 1:1."
The company added that the demerger would allow for an independent and distinct capital allocation approach and balance sheet management based on the specific needs of each business.
On July 4, shares of Raymond closed almost flat at Rs 2,935.45 apiece on the BSE. The stock has surged 68.87 percent on a year-to-date basis.
Last year, in a bid to become net-debt free, Raymond announced the demerger of its lifestyle business to Raymond Consumer Care, creating a listed entity with a pure-play B2C-focused lifestyle business. The lifestyle business includes suiting, B2C shirting, branded apparel, and subsidiaries such as the garmenting business and B2B shirting.
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