Raymond announces demerger of its real estate business

Raymond Limited today announced the vertical demerger of its real estate business into its wholly owned subsidiary, Raymond Realty Limited (RRL).

Upon completion of this demerger, Raymond and Raymond Realty will operate as separate listed entities within the Raymond Group post all statutory approvals.

The new entity will seek automatic listing on stock exchanges and according to the scheme of arrangement, each Raymond shareholder will receive 1 share of Raymond Realty for every 1 share held in Raymond.

This move comes after Raymond's real estate business reported revenue of ₹1,593 crore (43% year-on-year growth) and EBITDA of ₹370 crore in FY24, positioning it well to chart its own growth path as a separate entity.

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

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

Leveraging an asset-light model, recently Raymond Realty has launched its first JDA (joint development agreement) project in Bandra, Mumbai. Additionally, Raymond has signed three new JDAs in Mahim, Sion, and one more in Bandra East Mumbai, taking the combined revenue potential from four JDA projects in the Mumbai Metropolitan Region to over ₹7,000 crore. With the development of Thane Land Bank and current four JDA’s gives company the potential revenue of ₹32,000 crore.

“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. This strategy to demerge the real estate business into a separate company that will be listed through automatic route is another step to enhance the shareholder value. The existing shareholders of Raymond Limited will get the shares in the new listed Real Estate company in a ratio of 1:1,” says Gautam Hari Singhania, chairman and managing director, Raymond.

“The demerger aligns with Raymond Group's stated objectives of simplifying its corporate structure and enhancing shareholder value for operational and structural benefits. Leveraging Raymond's institutional strength, 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,” the company says.

Raymond is India’s largest integrated worsted suiting manufacturer that offers end-to-end solutions for fabric and garmenting. It has some of the leading brands within its portfolio ‘Raymond Ready to Wear’, ‘Park Avenue’, ‘ColorPlus’, ‘Parx’, ‘Raymond Made to Measure’ and ‘Ethnix by Raymond’ among others. The company has about 1,450 stores in more than 600 towns.

Raymond forayed into realty sector through the launch of its maiden project Ten X Habitat spread across 14 acres housing around 3,100 residential units.