Raymond Shares Hit Record High on Real Estate Demerger Approval

Tanushree Jaiswal Tanushree Jaiswal

Last Updated: 5th July 2024 - 03:13 pm

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Shares of Raymond surged by 18.5% to reach a record high on July 5 after the board approved the demerger of its real estate business, Raymond Realty. 

At 11:02 AM IST, shares of Raymond share price were trading at ₹3,392.45 on the NSE, down from their record high of ₹3,484. The demerger plan aims to consolidate the conglomerate's entire real estate business into a single entity, enabling it to leverage growth opportunities and attract new investors and strategic partners, according to Raymond. 

Under the demerger plan, Raymond will issue 6.65 crore shares of Raymond Realty with a face value of ₹10 per share. Shareholders of Raymond will receive one share of Raymond Realty for each share they hold, with no cash or alternative considerations involved. 

After completion, Raymond Realty will be listed on both the National Stock Exchange and BSE as a separate entity. "This strategic move comes as Raymond's Real Estate Business has achieved scale, reporting revenue of ₹1,593 crore (43% on year growth) and EBITDA of ₹370 crore in FY24, positioning it well to chart its own growth path as a separate entity," the company stated in an exchange filing.

"Raymond Realty has 100 acres of land in Thane with 11.4 mn sq ft RERA approved carpet area of which about 40 acres is currently under development. There are five ongoing projects worth ₹9,000 crore on its Thane land, with an additional potential to generate more than ₹16,000 crore, making a total potential revenue of over ₹25,000 crore from this land bank," it added.

Last year, Raymond demerged its lifestyle business into Raymond Consumer Care as part of its strategy to become debt-free. The lifestyle business included the suiting segment with manufacturing plants, B2C shirting, branded apparel, and subsidiaries such as the garmenting business and B2B shirting.
 

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