Raymond To Demerge Real Estate Business To Unlock Shareholder Value

Textile manufacture and real estate developer Raymond Ltd. will demerge its real estate business into a separate entity Raymond Realty Ltd. (RRL) to simplify its corporate structure and unlock the shareholder value.

Upon completion of the demerger, the company and RRL will operate as separate listed entities within the Raymond Group post all statutory approvals, Raymond said in a stock exchange announcement.

The new entity will seek automatic listing on stock exchanges and existing shareholders of Raymond will get the shares in the new listed real estate company in a ratio of 1:1.

Raymond said the strategic move comes as its real estate business has achieved scale, reporting revenue of 1,593 crore rupees (+43% YoY) and EBITDA of 370 crore rupees in FY24, positioning it well to chart its own growth path as a separate entity.

“Having stated that now we have clear three vectors of growth at Raymond Group, i.e. lifestyle, real estate and engineering, this corporate action is in line with creating shareholder value creation,” Raymond Chairman and Managing Director Gautam Hari Singhania said.

Raymond said the move will allow for independent, dedicated management teams with industry-specific expertise to sharpen business focus and tailor investment strategies to each sector's unique dynamics.

RAYMOND REALTY

The company said Raymond Realty has 100 acres of land in Thane with around 11.4 million square feet RERA-approved carpet area of which about 40 acres is currently under development.

There are five ongoing projects worth 9,000 crore rupees on its Thane land, with an additional potential to generate more than 16,000 crore rupees, making a total potential revenue of over 25,000 crore rupees from this land bank, it added.

The company said Raymond Realty also recently launched its first joint development agreement (JDA) project in Bandra, Mumbai. In addition, Raymond has signed three new JDAs in Mahim, Sion, and one more in Bandra East, taking the combined revenue potential from four JDA projects in the Mumbai Metropolitan Region to over 7,000 crore rupees, it noted.

The development of Thane land bank and current four JDAs gives the company a potential revenue of 32,000 crore rupees, according to the statement.

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