Over the demerger of the real estate segment, Raymond Shares reaches a record high.
Raymond share price: When the stock markets opened this morning, Raymond’s shares shot up about 10% to ₹3236 a share.
A day after the Group announced the vertical demerger of its real estate business into a wholly owned subsidiary, Raymond Realty Ltd (RRL), shares of Raymond reached an all-time high on Friday.
According to a business statement, the Board of Raymond Limited declared on Thursday that Raymond Limited and Raymond Realty Limited (RRL) will function as independent listed companies.
When the stock markets opened this morning, Raymond’s shares shot up about 10% to ₹3236 per share.
The business said on Thursday that it will pursue an automatic listing on stock exchanges for the new entity in the share market. Every shareholder of Raymond Ltd (RL) shall receive one share of RRL for each share held in Raymond Ltd, as per the plan of arrangement.
It is believed that Raymond’s decision to demerge its real estate division will help the group’s real estate business reach its full potential.
“The demerger is in line with the declared goals of Raymond Group, which include streamlining its corporate structure and increasing shareholder value for both structural and operational advantages. In a statement, the company said, “By utilizing Raymond’s institutional strength, the move will enable independent, committed management teams with industry-specific expertise to sharpen business focus and customize investment strategies to each sector’s unique dynamics.”
The Raymond Group’s real estate division recorded revenue of ₹1,593 crore in FY24, a 43% YoY increase. The company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) was ₹370 crore.
About 40 acres of the group’s about 100 acres in Thane, which has a carpet area permitted by the RERA at 11.4 million square feet, are presently under development. Its Thane land is home to five active projects valued over ₹9,000 crore, and there is further potential for over ₹16,000 crore in revenue, for a total potential revenue from this land bank of over ₹25,000 crore.
Furthermore, the business has inked three more Joint Development Agreements (JDAs) in Mahim, Sion, and Bandra East Mumbai, bringing the total potential revenue from four JDA projects in the Mumbai Metropolitan Area to more than ₹7,000 crore. The corporation can potentially earn ₹32,000 crore from the development of Thane Land Bank and the four JDAs that are now in place.
“An additional measure to increase shareholder value is the demerger of the real estate business into a distinct company that will be listed automatically. The new listed real estate company’s shares will be distributed in a 1:1 ratio to the current Raymond Limited shareholders, according to Gautam Hari Singhania, Chairman and Managing Director of Raymond.
According to the company, the demerger is in line with the goals that Raymond Group has set out for itself, which include streamlining its corporate structure and increasing shareholder value for both structural and operational advantages. With industry-specific knowledge, the newly formed independent and committed management teams will be able to better focus the company’s operations and customize investment plans to fit the particulars of each industry.
