Raymond Realty Demerger Gets BSE, NSE Approval

Raymond Ltd. announced that it has received “no objection” letters from the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) for the demerger of its real estate arm, Raymond Realty Ltd. This was approved by the company’s board in July 2024, aiming to focus on the growth potential of the real estate business and attract fresh investors.

What This Means for Shareholders

If you own shares of Raymond Ltd., here’s the good news: for every share you hold, you’ll get one share of Raymond Realty. The plan also includes the issuance of 6.65 crore shares of Raymond Realty, each with a face value of Rs.10, subject to regulatory and shareholder approvals.

And it’s not just about real estate. Raymond Lifestyle, the demerged lifestyle business, is also on its way to becoming a standalone entity. Shareholders will receive four shares in Raymond Lifestyle for every five shares of Raymond Ltd. they hold.

Real Estate Growth 

Raymond Realty has been moving up. In FY24, the real estate segment clocked Rs.1,593 crore in revenue, a 43% jump from the previous year with an EBITDA of Rs.370 crore. Projects in Thane and Mumbai, including 11.4 million sq. ft. of RERA approved carpet area, are driving this growth.

Raymond expects the real estate and engineering divisions to make up 45% of its revenue in the next five years. Compare that to FY24, where real estate contributed 17%, and you can see where the company’s focus is shifting.

Share Performance 

Following the announcement, Raymond’s stock saw a 7.17% spike, hitting Rs.1,529.20 per share today. Year-to-date, the stock is down 12.18% but the analysts are optimistic, most giving it a “buy” rating with a potential upside of 71.8%. It’s worth keeping the risks in mind, so maybe run it by your financial advisor for a clearer picture.

Conclusion: With the demerger, Raymond is splitting its core businesses into focused, growth oriented entities. For investors, this means opportunities in real estate, lifestyle, and engineering, each with its own plan for growth and penetration into the market.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.