July 5, 2024: Raymond Limited on July 4 announced the vertical demerger of its real estate business into its wholly owned subsidiary, Raymond Realty Limited (RRL). Upon completion of this demerger, Raymond Ltd and Raymond Realty Limited (RRL) will operate as separate listed entities within the Raymond Group post all statutory approvals, the company mentioned in a regulatory filing.
As per the company’s official statement, the new entity will seek automatic listing on stock exchanges and according to the scheme of arrangement, each Raymond Ltd (RL) shareholder will receive 1 share of RRL for every 1 share held in Raymond Limited. This strategic move comes as Raymond’s real estate business has achieved scale, reporting revenue of Rs 1,593 crore (43% YoY growth) and EBITDA of Rs 370 crore in FY24, positioning it well to chart its own growth path as a separate entity.
Gautam Hari Singhania, chairman & managing director, Raymond Limited, said,“ 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.”
The demerger is executed to simplify Raymond Group’s corporate structure and enhance 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.
Raymond Realty has 100 acre of land in Thane with 11.4 million square foot (msf) RERA approved carpet area of which about 40 acre is currently under development. There are five ongoing projects worth Rs 9,000 crore on its Thane land, with an additional potential to generate more than Rs 16,000 crore, making a total potential revenue of over Rs 25,000 crore from this land bank.
Leveraging an asset-light model, Raymond Realty launched its first joint development agreement (JDA) 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 (MMR) to over Rs 7,000 crore. With the development of Thane land bank and current 4 JDA’s gives the company the potential revenue of Rs 32,000 crore.
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