Raymond Lifestyle share lists at ₹3,000 on BSE; debuts at 99% over base price

Raymond Lifestyle Ltd (RLL), the demerged lifestyle business of billionaire Gautam Singhania-led Raymond Group, has debuted at ₹3,000 per share on the BSE, a premium of 99.5% over its base price of ₹1,503.30 per share. On the NSE, RLL shares listed at 3,020, up 93.2% over the discovered price of ₹1,562.65 apiece.

The shares of RLL were automatically listed on stock exchanges after the demerger of the lifestyle business was completed on June 30, 2024. As part of the demerger, shareholders of Raymond will receive 4 shares of Raymond Lifestyle for every 5 shares they hold in the company. The demerger is part of the group’s strategy to streamline its operations, focus on core competencies, and unlock value for shareholders. It has a legacy collection of well-established brands such as Park Avenue, Raymond, Parx, Ethnics by Raymond and ColorPlus.

Post listing, shares of Raymond Lifestyle dropped 5% to hit its lower circuit limit of ₹2,850 on the BSE, while its market capitalisation slipped to ₹17,363 crore. In the first hour of trade so far, the stock hit a high of ₹3,100, with 0.2 lakh shares changing hands over the counter.

Meanwhile, shares of Raymond Lifestyle’ parent, Raymond, extended loss for the second straight session, falling as much as 3.6% to ₹2,003.10 on the BSE. Raymond shares went ex-Lifestyle business in July.

In the first quarter ended June 30, 2024, Raymond Lifestyle posted net revenue of ₹1,249 crore, down 8% from ₹1,353 crore in the year ago period.  The EBITDA dropped 51% to ₹87 crore as compared to ₹180 crore in the same period last year. The revenue performance and margins were impacted due to subdued consumer demand, prolonged heat waves, general elections, fewer wedding dates and inflation.

Overall, Raymond reported a 26.7% increase in consolidated net profit from continuing operations at ₹57.04 crore in the first quarter ended June 2024, compared to ₹45.02 crore in the same quarter last fiscal. Revenue from operations nearly doubled to ₹998 crore as against ₹517 crore in the year-ago period. On the operating front, EBITDA jumped 82% YoY to ₹162 crore, while margin dropped to 16.2% from 17.3% in the year ago period.

Going ahead, Raymond Lifestyle is expected to report 12-15% revenue growth in the lifestyle business and to double its EBITDA to ₹2,000 crore by FY28, Motilal Oswal said in a report released last month. “The growth will be led by the doubling of its exclusive brand outlets (EBO) network, capitalising on Bangladesh +1 and China +1 opportunity, the extension of new categories such as innerwear and sleepwear, and wedding wear led growth,” it said in a report.

After Raymond Lifestyle listing today, the Group has initiated the vertical demerger of its real estate business into its wholly owned subsidiary, Raymond Realty Limited (RRL). Upon completion of this demerger, Raymond Ltd and Raymond Realty Limited (RRL) will operate as separate listed entities within the Raymond Group, pending all statutory approvals. The new entity will seek automatic listing on stock exchanges, and according to the scheme of arrangement, each Raymond Ltd (RL) shareholder will receive 1 share of RRL for every 1 share held in Raymond Limited. This strategic move comes as Raymond's Real Estate Business has achieved scale, reporting revenue of ₹1,593 crore (43% YoY growth) and EBITDA of ₹370 crore in FY24, positioning it well to chart its own growth path as a separate entity.

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