Raymond Receives 'No Objection' From BSE, NSE For Demerger Of Realty Business

Raymond Ltd. on Thursday received 'no objection' letter from the National Stock Exchange and the BSE—the two main bourses—for the demerger of Raymond Realty Ltd, the company's real estate arm. This comes over two months after the demerger of Raymond's lifestyle business.

Raymond Realty, after obtaining the necessary approvals, will be listed on both the NSE and the BSE.

The demerger plan aims to exploit the growth potential of the real estate business and attract a fresh set of investors and strategic partners to participate in it, Raymond said.

The current promoter ownership of the Mumbai-based garment maker is 49.01%. The existing shareholders of the demerged company would hold the shares of two listed entities after the scheme becomes effective.

The demerger plan had received nod from Raymond's board of directors in July. 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, as per the scheme of arrangement.

Raymond anticipates that its real estate and engineering division will account for up to 45% of group revenues over the next four to five years, Chief Financial Officer Amit Agarwal said in June.

This growth is in line with the company’s strategic focus on the high-potential real estate sector, with key projects in Thane and Mumbai expected to drive significant revenue growth.

In fiscal 2024, real estate contributed 17% to the company's overall revenues, rising from 13% in the preceding year. Meanwhile, the textile business saw a slight decline in its contribution, from 77% to 74%, while the engineering sector maintained a steady share of 9-10%.

Shares of Raymond on Thursday closed 3.74% lower at Rs 1,426.9 apiece on the NSE, compared to a 0.72% decline in the benchmark Nifty 50. The stock has risen by 32.54% in the last 12 months and by 32.8% year-to-date.

Out of five analysts tracking the company, four maintain a 'buy' rating and one recommends a 'hold,' according to Bloomberg data. The average of 12-month analysts' price target implies a potential upside of 71.8%.