Raymond Approves Demerger Of Realty Arm As Business Booms
Raymond Ltd. on Thursday approved the demerger of its real estate arm, Raymond Realty Ltd., as it eyes to capture value in the booming realty space. The company will issue 6.65 crore shares of Raymond Realty, having face value of Rs 10 per share upon demerger, which will be subject to approval of shareholders and regulators.
One share of Raymond Realty will be given for every share held in the parent firm, according to an exchange filing. The current promoter ownership in the Mumbai-based garment-maker is 49.01%.
Raymond Realty will be listed on both the National Stock Exchange and BSE after obtaining necessary approvals. The existing shareholders of the demerged company would hold the shares of two listed entities after the scheme becomes effective, the company said.
The demerger plan aims "to exploit the growth potential of the real estate business and attract fresh set of investors/strategic partners to participate in the real estate business", Raymond said.
Bright Outlook For Real Estate
The real estate business brought in a revenue of Rs 1,592 crore on a standalone basis in fiscal 2024, contributing 24.16% to the total turnover of Raymond.
The company is aiming for a more significant contribution from its real estate and engineering divisions in its financial structure, and expects the verticals to contribute up to 45% to the group's revenue over the next four to five years, Chief Financial Officer Amit Agarwal told NDTV Profit earlier this month.
Raymond owns a 100-acre plot in Thane, with roughly 4.5 million square feet already sold, generating approximately Rs 9,000 crore. An additional Rs 25,000 crore is expected from the remaining 60 acres over seven to eight years, with plans for projects in Bandra, Mahim, and Sion.
Over the next three to four years, 40–45% of real estate revenue will derive from joint development agreements, and 50–55% from the Thane project. Agarwal expects JDAs to yield Rs 8,000–10,000 crore by March 2024. The company expects real estate to contribute 25-30% to the group's revenue.
Last month, Gautam Hari Singhania was reappointed as Managing Director of Raymond, even as the proposal faced opposition.
Shares of Raymond closed 0.67% lower at Rs 2,941.9 apiece, ahead of the demerger announcement, as compared to a flat benchmark BSE Sensex.
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