Raymond Share Price Settles 14% Higher Ahead Of Raymond Realty Listing

Shares of Raymond Ltd. settled 14% higher on Monday, ahead of the listing of Raymond Realty on BSE and NSE on July 1.

The realty arm is being demerged from the parent company to increase shareholder value and magnify its focus on the real estate business. This focus will primarily be on the Mumbai Metropolitan Region.

The firm plans to launch six new residential projects this fiscal, all located in the MMR, offering apartments ranging from Rs 2 crore to Rs 20 crore to target both premium and luxury housing segments.

Ventura Research suggests that the demerger will give investors a focused opportunity to invest in India's real estate market. This is because the separation is expected to improve operational clarity and financial transparency within the real estate business.

The company's business model is fueled by its 100-acre land bank in Thane and a low asset intensity expansion approach via joint development agreements in Mumbai's premium locations such as Bandra, Mahim, Sion, and Wadala.

These six joint development authorities in Mumbai provide an added gross development value of around Rs 14,000 crore. This would ensure healthy profitability and cash flows without stressing the balance sheet, as the real estate firm is primarily responsible for construction, Ventura Research said.

Shares of Raymond rose as much as 14.99% to Rs 717.95 apiece. They pared gains marginally to close 14.21% higher at Rs 713.1 on the NSE, as compared to a 0.48% decline in the benchmark Nifty 50.

The stock has risen 10.19% in the last 12 months and 24.73% year-to-date.

Out of five analysts tracking the company, four maintain a 'buy' rating, and one recommends a 'hold', according to Bloomberg data.