Shares of Raymond Ltd. declined the most in over four weeks after it announced the sale of its fast-moving consumer goods business and a demerger of its consumer care and pure-play real estate segments.
Raymond Ltd. announced that it will demerge its lifestyle business to Raymond Consumer Care Ltd. in an exchange filing on Thursday. It plans to list the unit separately and focus on making it a pure-play business, enabling it to attain net debt-free status. Apart from this, it has sold its FMCG business to Godrej Consumer Products Ltd. for Rs 2,825 crore.
Raymond Consumer Care is primarily owned by the promoter company and Raymond. Consequent upon the sale of the FMCG business, the promoter will deploy the entire proceeds of the transaction into the lifestyle business, it said on Thursday.
After the demerger, Raymond and Raymond Lifestyle Business will be the two listed entities of the group. Shareholders of Raymond Ltd. will get four shares in Raymond Consumer Care for every five shares held in the former, based on the swap ratio.
As of 10:18 a.m. on Friday, shares of Raymond Ltd. had dropped 5.88% to Rs 1,614 apiece, compared to a 0.13% decline in the NSE Nifty 50. The stock fell as much as 6.06% intraday, the most since March 28.
The total traded volume so far in the day stood at 4.1 times its 30-day average. The relative strength index was 68.8.
Four analysts tracking the company maintain a 'buy' rating on the stock, according to Bloomberg data. The average 12-month consensus price target implies a potential upside of 14.2%.
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