Raymond shares hit record high after firm announces demerger of real estate business

Raymond on Thursday announced the vertical demerger of its real estate business into its wholly owned subsidiary, Raymond Realty (RRL). The firm said that upon completion of this demerger, Raymond and Raymond Realty will operate as separate listed entities within the Raymond Group post all statutory approvals. Shares of Raymond hit a fresh 52-week high of ₹3,484 and were trading higher by over 17% on Friday.

The new entity will seek automatic listing on stock exchanges and each Raymond shareholder will get one share of RRL for every share held in Raymond, the company said in an exchange filing.

Raymond said that the segregation of the business verticals will enable the firms to move forward independently, with specialisation building on their respective capabilities. It will also help to channelise resources required for all the businesses to focus on the growing businesses, attracting the right talent and providing enhanced growth opportunities to existing talent in line with a sharper strategic focus on each business segment under separate entities. The demerger will also unlock shareholder value and provide better access to capital, it said.

Raymond Realty recorded a 43% year-on-year (YoY) growth in its revenue during FY24 at ₹1,593 crore while its earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at ₹370 crore. Raymond Realty has about 100 acres of land in Thane with nearly 1.14 crore square feet RERA approved carpet area of which about 40 acres are currently under development. The company has 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 the land bank.

Shares of the company have risen by nearly 97% since the beginning of the year. The stock has gained over 96% in the last one year.