Shares of Raymond skyrocketed 18.5 percent to hit a record high on July 5 after the board approved demerger of its real estate business, Raymond Realty.
The stock had hit a record high of Rs 3151.75 on July 1. Besides, it has bounced back 66 per cent from its previous month’s low of Rs 1,890 touched on June 4. At 09:30 AM, Raymond was trading 3 per cent higher at Rs 3,041 as compared to 0.68 per cent decline in the BSE Sensex.
In a regulatory filing, Raymond announced the vertical demerger of its Real Estate business into its wholly-owned subsidiary, Raymond Realty (RRL). Upon the completion of this demerger, Raymond and RRL will operate as separate listed entities within the Raymond Group post all statutory approvals, it said.
The new entity will seek automatic listing on the stock exchanges and, according to the scheme of arrangement, each Raymond shareholder will receive one share of RRL for every one share held in Raymond, the company said.
The demerger aligns with Raymond Group’s stated objectives of simplifying its corporate structure and enhancing shareholder value for operational and structural benefits.
Raymond is a leading Indian Textile, Lifestyle and Branded Apparel company. The company has its wide network of operations in local as well foreign market. It sells its product through multiple channels including wholesale, franchisee, retail etc. The company is also engaged in the business of real estate constructions/real estate development.
Raymond Realty has roughly 100 acres of land in Thane with 11.4 million 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.
Leveraging an asset-light model, Raymond Realty, recently, launched its first joint development agreement (JDA) project in Bandra, Mumbai. Additionally, Raymond has signed three new JDAs in Mahim, Sion, and one more in Bandra East, Mumbai, taking the combined revenue potential from the four JDA projects in the Mumbai Metropolitan Region to over Rs 7,000 crore.
With the development of Thane Land Bank and four JDAs gives company the potential revenue of Rs 32,000 crore, the company said.
As India continues to be a preferred sourcing destination, the China plus one strategy is playing its part. The management said Raymond is expanding its garmenting capacity by a third of its current levels. With this expansion of the capacity, once fully commissioned, will make Raymond the third largest suit maker in the world.
Meanwhile, Raymond said the company anticipates maintaining a profitable growth trajectory.
“In the domestic market, consumer sentiment is expected to remain positive, driven by the approach of wedding and festive seasons and surging demand for formal and daily wear categories. The company aims to introduce new initiatives to bolster growth,” it said in its FY24 annual report.
In the branded apparel segment, Raymond aims to diversify its product range through demerging its lifestyle business, facilitating new launches in its core portfolio, emphasising casualisation and expanding the ‘Ethnix’ wear category.
Separately, upon acquisition of Maini Precision Products Limited (MPPL) business, the Raymond Group also aims to venture into sunrise sectors of Aerospace, Defense and electric vehicle (EV) components.
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