Raymond demerger: Three listed entities post-completion of formalities, lifestyle biz to debut ‘soon’

Raymond Group has clarified in a statement to stock exchanges on Tuesday, September 3, that shares of Raymond Lifestyle are expected to be listed soon as part of the demerger plans of its lifestyle business. The textile major also said that after the formalities of demerger plans, the Raymond Group will have three listed entities -Raymond Limited, Raymond Lifestyle Limited and Raymond Realty Limited.

After the company's analyst meeting, domestic brokerages said that Raymond Lifestyle would likely list during the first week of September 2024. The firm anticipates doubling its EBITDA to over ₹20 billion by FY28 and is forecasting 12–15 per cent sales growth in the lifestyle sector, said analysts.

Also Read: Raymond Lifestyle to list on bourses in September first week. Analysts decode likely valuations, business, more.

Raymond clarifies on demerger plans

Raymond said in a regulatory filing to the BSE on Tuesday, ‘’As already intimated to the stock exchanges from time to time, Raymond Limited has demerged its lifestyle business to Raymond Lifestyle Limited (RLL) through a composite scheme of arrangement and as per the said Scheme shares of RLL are expected to be listed soon.''

Raymond added in its statement that it had intimated to the stock exchanges on July 04, 2024, that the Board of Directors approved the demerger scheme of its realty business to Raymond Realty Limited, and the demerged entity will be listed on stock exchanges after obtaining the necessary statutory/ regulatory approvals.  

The company has already applied for the grant of NOC under Regulation 37 with both stock exchanges. "After all formalities for both schemes of arrangement are completed, there will be three listed entities in the Raymond Group: Raymond Limited, Raymond Lifestyle Limited, and Raymond Realty Limited," said Raymond.

Also Read: Raymond share price jumps 18% in 3 days on demerger plans; Should you buy the multibagger stock?

Brokerages on Raymond

Brokerages said that Raymond will split its lifestyle business into a distinct company as part of the corporate restructuring. Raymond shareholders will be given four equity shares of Raymond Lifestyle for every five shares they hold. 

Raymond revealed the separation of its real estate business into another company called Raymond Realty. The Raymond Group will now comprise three publicly traded entities: Lifestyle, Real Estate, and the existing entity (engineering).

Motilal Oswal Financial Services reported that Raymond has been actively selling the FMCG business, separating the lifestyle business, restructuring the real estate business, and setting up an engineering unit post-Maini Precision acquisition. These actions are anticipated to generate shareholder value for each business through effective management, cash optimization, and cost optimization.

Also Read: Gautam Singhania says Raymond’s business inquiries surging after Bangladesh crisis: ’Ready to grab opportunity...’

Raymond Stock Price Trend

On Tuesday, shares of Raymond opened at ₹2,020.05 and gained 7.9 per cent to hit an intra day high of ₹2,180.85 against a 52-week high of ₹3,493, before settling 5.14 per cent higher at ₹2,111.20 apiece on the BSE. Raymond's share price has soared by 738 per cent in the last three years, providing investors with multi-bagger returns.