On Thursday, Raymond Ltd announced its intention to demerge its real estate business, aiming to unlock shareholder value and capitalize on growth opportunities in the Indian property market.
According to the arrangement, each shareholder of Raymond Ltd will receive one share of Raymond Realty for every share held in Raymond Ltd. The real estate division generated standalone operational revenue of Rs.1,592.65 crore in the last fiscal year, representing 24% of Raymond Ltd's total revenue.
This process will proceed upon obtaining necessary approvals from the jurisdictional bench of the National Company Law Tribunal (NCLT) and approvals from shareholders, creditors, the central government, or any other competent authority directed by the NCLT.
Upon the scheme taking effect on the specified date, following the demerger, Raymond Realty will issue 6,65,73,731 equity shares of Raymond Realty Ltd with a face value of Rs.10 each to shareholders of Raymond Ltd.
Raymond Realty Ltd's shares will be listed on both BSE Ltd and the National Stock Exchange of India (NSE).
Raymond Ltd explained that it aims to reorganize its real estate business conducted by itself and its subsidiaries.
To leverage the growth potential of the real estate business and attract new investors or strategic partners, the proposal aims to consolidate the entire Group's real estate operations into a single entity.
The company said,"Therefore, it is proposed to demerge the Real Estate Business Undertaking of Raymond Limited into Raymond Realty Limited thereby unlocking the value of the real estate business of Raymond Limited as a whole."
Raymond's real estate business has reached a significant scale, with reported revenue of Rs.1,593 crore (a 43% year-on-year growth) and EBITDA of Rs.370 crore in FY24. This positions the business well to pursue its own growth trajectory as a distinct entity.
There are five ongoing projects valued at Rs.9,000 crore on its Thane land, with an additional potential to generate over Rs.16,000 crore, resulting in a total potential revenue exceeding Rs.25,000 crore from this land bank.
He further mentioned that the decision to separate the real estate business into a distinct entity, which will be publicly listed via an automatic process, is part of an ongoing effort to increase shareholder value.
Gautam Hari Singhania, Chairman cum Managing Director of Raymond Ltd, 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."
Raymond is the top integrated worsted suiting manufacturer in India, offering complete solutions for fabric and garment production. The company includes well-known brands like 'Raymond Ready to Wear', 'Park Avenue', 'ColorPlus', 'Parx', 'Raymond Made to Measure', and 'Ethnix by Raymond'.
With a large retail presence, Raymond has one of the most extensive exclusive networks in the nation, with around 1,450 stores across over 600 towns.
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