Shares of Raymond Ltd. adjusted on the stock exchanges on Thursday for the demerger of the lifestyle business, Raymond Lifestyle Ltd.
The share-price adjustment through pre-open price-discovery process pegs the value of the company at Rs 1,202.65 apiece, giving the retail and lifestyle business a value of Rs 6,405.2 crore. Raymond's stock closed at Rs 3,152.65 apiece on the BSE on Wednesday.
Raymond Lifestyle was demerged from the parent and shareholders were given four shares of the face value of Rs 2 for every five shares of Rs 5 face value of the parent.
Raymond decided to demerge its lifestyle business to Raymond Lifestyle, formerly Raymond Consumer Care Ltd., which will list separately. After the demerger, Raymond and Raymond Lifestyle will be the two listed entities of the group. Raymond has also announced a vertical split to demerge its real-estate business.
While the Raymond Lifestyle business, based on the adjusted stock price, is valued at over Rs 6,400 crore, the company has ascribed 0.57% as the acquisition cost for the Raymond Lifestyle. On Wednesday's closing price of Rs 3,152.65 apiece on the BSE, the cost of acquisition comes to Rs 17.97 apiece. This cost will be used for calculation of capital gains by the investors.
"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," Chief Financial Officer Amit Agarwal had said earlier.
The company's revenue from its lifestyle business during the fourth quarter of the last financial year rose 5.5% to Rs 1,822 crore. The operating income—or the earnings before interest, tax, depreciation and amortisation—rose 8% to Rs 312 crore year-on-year during the period.
Raymond Ltd.'s stock closed 5% higher at Rs 2,001.3 per share on Thursday, compared to a 0.03% decline in the benchmark NSE Nifty 50.
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