Raymond Demerges Lifestyle Business To Become Net Debt-Free

Raymond Ltd. will demerge its lifestyle business to Raymond Consumer Care Ltd., which it plans to list separately and focus on making into a pure play B2C lifestyle business, enabling it to attain net debt-free status.

Raymond Consumer Care is majorly owned by the promoter company and Raymond. Consequent upon sale of the FMCG business, the promoter would deploy the entire proceeds of 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.

"The move to demerge the Lifestyle Business from Raymond Ltd. will enable the business to be net debt free and will become an independently listed entity," said Chief Financial Officer Amit Agarwal.

"Post demerger of the Lifestyle Business, Raymond Ltd. would primarily be a listed real estate company with investments in engineering and denim business."

The group, which has a FMCG business under Raymond Consumer Care has sold the same along with trademarks such as Park Avenue Deo, KS Deo, Kamasutra and Premium to Godrej Consumer Products Ltd. for Rs 2,825 crore through a slump sale.

Raymond Consumer Care will retain its condom manufacturing facility and will continue to do contract manufacturing in Aurangabad, Maharashtra, for domestic and international markets.

Consequent to the demerger, shareholders of Raymond will get shares in RCCL based on a swap ratio, under which each shareholder of Raymond will get four shares of RCCL for every five shares held, based on the swap ratio.

Raymond's consolidated gross debt stood at Rs 2,022 crore, while its net debt stood at Rs 932 crore, as of December 2022.

The management said its focus has been on becoming net debt-free and the demerger along with the sale of consumer care business will help it attain the goal and add to the growth prospect of the company.

The lifestyle business consisting of suiting business with manufacturing plants, B2C shirting and market-to-market businesses, branded apparel with its portfolio of brands and subsidiaries, including garmenting business with manufacturing facilities and B2B shirting business with manufacturing plants will be demerged into RCCL.

"In line with our commitment for creating shareholder value, we have taken an affirmative action by demerging our Lifestyle Business that will be a separate listed entity with zero net debt," said Gautam Hari Singhania, chairperson and managing director at Raymond.

"At Raymond Group, the realty business will also be the listed entity through Raymond Ltd.," Singhania said. "At the promoter level, we continue to remain committed, and the efforts have been demonstrated by infusing funds generated from monetisation of assets."