Raymond to demerge its real estate business into its wholly-owned subsidiary called Raymond Realty
Raymond Limited's shares soared 18 per cent to touch 52-week high of Rs 3,484 on NSE after announcement of demerger of their real estate business. Following the demerger Raymond ltd will have a separate wholly-owned subsidiary Raymond Realty. The news was announced after the Board of Directors meeting on July 4, 2024.
The stock settled at Rs 3,233, up by 9.97 per cent or 293 points on the NSE.
Once the process of demerger is complete, Raymond Ltd and Raymond Realty Limited (RRL) will operate as two separate listed entities under the Raymond Group.
The decision of demerger came with an intention to maximize profit in the growing real estate business and attracting investments. "The real estate sector has its own unique opportunities and challenges keeping the entity separate would help in managing the business efficiently," the company said it in the filing.
"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," said Gautam Hari Singhania, Chairman and Managing Director of Raymond Limited.
He added, 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.
The separation of the business will help in specializing XXX. Along with this it will also help investors with varied interests to invest in different entities focusing in different businesses.
Once the demerger is complete the equity shares of Raymond Realty will be listed on BSE and NSE. On year-to-date, the shares of the company have delivered a return of 85.91 per cent on the National Stock Exchange as of July 5, 2024.