New Delhi: Textile major Raymond Ltd on Thursday said it will demerge real estate business to unlock value for shareholders and tap growth potential in the Indian real estate market.
In a regulatory filing, the company reported that its board of directors approved the plan of arrangement of Raymond Ltd (demerged company) and Raymond Realty Ltd (resulting company) and their respective shareholders.
Under the plan of arrangement, each shareholder of Raymond Ltd will receive one share in Raymond Realty for each share held in Raymond Ltd.
The standalone operating income of the real estate division amounted to Rs 1,592.65 crore in the last fiscal year, accounting for 24 per cent of Raymond Ltd's total income.
This will be subject to the required approvals and sanctions of the jurisdictional tribunal of the National Company Law Tribunal (NCLT) and subject to the approval of the shareholders and/or creditors, the central government or such other competent authority as may be directed by the NCLT. .
Once the scheme comes into effect on the effective date, at the time of demerger, Raymond Realty would issue 6,65,73,731 shares of Raymond Realty Ltd with a face value of Rs 10 each to the shareholders of Raymond Ltd.
The shares issued by Raymond Realty Ltd would be listed on BSE Ltd and the National Stock Exchange of India (NSE).
Explaining the reasons, Raymond Ltd said it is seeking to reorganize the real estate business it carries on itself and through its subsidiaries.
“To exploit the growth potential of the real estate business and attract a new set of investors/strategic partners to participate in the real estate business, it is proposed to consolidate the entire real estate business of the Group under a single entity.
"Therefore, it is proposed to demerge the real estate business of Raymond Limited into Raymond Realty Limited, thereby unlocking the value of the real estate business of Raymond Limited as a whole," the company said.
Raymond Ltd said the new entity will seek automatic listing on stock exchanges.
This strategic move comes as Raymond's real estate business has achieved scale, reporting revenue of Rs 1,593 crore (43 per cent YoY growth) and EBITDA of Rs 370 crore in FY24, positioning it well to chart its own path of growth as a separate entity.
Raymond Realty has around 100 acres of land in Thane with approximately 11.4 million sq ft of RERA approved carpet area, of which around 40 acres are currently under development.
There are five ongoing projects worth Rs 9,000 crore in its Thane land, with additional potential to generate over Rs 16,000 crore, generating a total potential income of over Rs 25,000 crore from this land bank. .
Leveraging an asset-light model, Raymond Realty recently 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 of four JDA projects in the Mumbai Metropolitan Region to over Rs 7,000 crore.
The development of Thane Land Bank and the existing 4 JDAs provides potential revenue of Rs 32,000 crore to the company.
"Having stated that we now have three clear vectors of growth in the Raymond group i.e. lifestyle, real estate and engineering, this corporate action is in line with creating value for shareholders," said Gautam Hari Singhania, Chairman and CEO of Raymond Ltd.
This strategy of spinning off the real estate business into an independent company that will be self-listed is another step to enhance shareholder value, he added.
"The existing shareholders of Raymond Limited will get the shares of the new listed real estate company in the ratio of 1:1," Singhania said.
Raymond is India's largest integrated worsted suit manufacturer offering end-to-end solutions for fabrics and garments.
It has within its portfolio some of the leading brands 'Raymond Ready to Wear', 'Park Avenue', 'ColorPlus', 'Parx', 'Raymond Made to Measure' and 'Ethnix by Raymond', among others.
Raymond has one of the largest exclusive retail networks in the country with around 1,450 stores in more than 600 cities.
The group has a presence in the engineering space dedicated to precision engineered products with an expansive presence in the domestic and international markets.
In a regulatory filing, the company reported that its board of directors approved the plan of arrangement of Raymond Ltd (demerged company) and Raymond Realty Ltd (resulting company) and their respective shareholders.
Under the plan of arrangement, each shareholder of Raymond Ltd will receive one share in Raymond Realty for each share held in Raymond Ltd.
The standalone operating income of the real estate division amounted to Rs 1,592.65 crore in the last fiscal year, accounting for 24 per cent of Raymond Ltd's total income.
This will be subject to the required approvals and sanctions of the jurisdictional tribunal of the National Company Law Tribunal (NCLT) and subject to the approval of the shareholders and/or creditors, the central government or such other competent authority as may be directed by the NCLT. .
Once the scheme comes into effect on the effective date, at the time of demerger, Raymond Realty would issue 6,65,73,731 shares of Raymond Realty Ltd with a face value of Rs 10 each to the shareholders of Raymond Ltd.
The shares issued by Raymond Realty Ltd would be listed on BSE Ltd and the National Stock Exchange of India (NSE).
Explaining the reasons, Raymond Ltd said it is seeking to reorganize the real estate business it carries on itself and through its subsidiaries.
“To exploit the growth potential of the real estate business and attract a new set of investors/strategic partners to participate in the real estate business, it is proposed to consolidate the entire real estate business of the Group under a single entity.
"Therefore, it is proposed to demerge the real estate business of Raymond Limited into Raymond Realty Limited, thereby unlocking the value of the real estate business of Raymond Limited as a whole," the company said.
Raymond Ltd said the new entity will seek automatic listing on stock exchanges.
This strategic move comes as Raymond's real estate business has achieved scale, reporting revenue of Rs 1,593 crore (43 per cent YoY growth) and EBITDA of Rs 370 crore in FY24, positioning it well to chart its own path of growth as a separate entity.
Raymond Realty has around 100 acres of land in Thane with approximately 11.4 million sq ft of RERA approved carpet area, of which around 40 acres are currently under development.
There are five ongoing projects worth Rs 9,000 crore in its Thane land, with additional potential to generate over Rs 16,000 crore, generating a total potential income of over Rs 25,000 crore from this land bank. .
Leveraging an asset-light model, Raymond Realty recently 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 of four JDA projects in the Mumbai Metropolitan Region to over Rs 7,000 crore.
The development of Thane Land Bank and the existing 4 JDAs provides potential revenue of Rs 32,000 crore to the company.
"Having stated that we now have three clear vectors of growth in the Raymond group i.e. lifestyle, real estate and engineering, this corporate action is in line with creating value for shareholders," said Gautam Hari Singhania, Chairman and CEO of Raymond Ltd.
This strategy of spinning off the real estate business into an independent company that will be self-listed is another step to enhance shareholder value, he added.
"The existing shareholders of Raymond Limited will get the shares of the new listed real estate company in the ratio of 1:1," Singhania said.
Raymond is India's largest integrated worsted suit manufacturer offering end-to-end solutions for fabrics and garments.
It has within its portfolio some of the leading brands 'Raymond Ready to Wear', 'Park Avenue', 'ColorPlus', 'Parx', 'Raymond Made to Measure' and 'Ethnix by Raymond', among others.
Raymond has one of the largest exclusive retail networks in the country with around 1,450 stores in more than 600 cities.
The group has a presence in the engineering space dedicated to precision engineered products with an expansive presence in the domestic and international markets.