Raymond Ltd Announces Vertical Demerger of Real Estate Business

On July 4, 2024, Raymond Ltd announced through a stock exchange filing the vertical demerger of its Real Estate Business into its wholly owned subsidiary, Raymond Realty Limited (RRL).

The company stated that post-demerger, both Raymond Ltd and Raymond Realty Limited will function as separate listed entities within the Raymond Group, pending regulatory approvals. Under the proposed scheme, each shareholder of Raymond Ltd will receive 1 share of RRL for every 1 share held in Raymond Limited.

This strategic decision follows Raymond’s Real Estate Business achieving significant growth, with FY 2024 revenues reaching ₹1,593 crore (a 43% year-on-year increase) and EBITDA amounting to ₹370 crore.

Raymond Realty currently holds approximately 100 acres of land in Thane, with about 11.4 million square feet of RERA-approved carpet area, of which 40 acres are under active development. The Thane land bank supports ongoing projects valued at ₹9,000 crore, with potential revenues exceeding ₹16,000 crore, totalling a potential revenue of over ₹25,000 crore.

As per the exchange filing, recently, Raymond Realty has adopted an asset-light strategy and launched its initial Joint Development Agreement (JDA) project in Bandra, Mumbai. Moreover, agreements for three additional JDAs in Mahim, Sion, and Bandra East Mumbai bring the combined revenue potential from these projects in the Mumbai Metropolitan Region to over ₹7,000 crore. The combined revenue potential from Thane’s land bank and ongoing JDAs is estimated at ₹32,000 crore.

The company also added that the demerger is in line with Raymond Group’s objective to streamline its corporate structure and enhance shareholder value by allowing each entity to focus independently on its respective sectors. Leveraging Raymond’s institutional strength, the separation will empower dedicated management teams with specialised industry knowledge to optimise business strategies tailored to each sector’s unique dynamics.

About Raymond Ltd

Raymond Limited is a diversified group with significant interests in the textile and apparel sectors, alongside operations spanning various segments like FMCG, Engineering and Real Estate. Its presence extends across 55+ countries, encompassing markets in the USA, Europe, Japan, and the Middle East.

On July 5, 2024, the share price of Raymond Ltd opened at ₹3,040.00, touching the day’s high at ₹3,240.00, as of 10:26 AM on the NSE.

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