Company Separates Retail Arm, Creating Two Distinct Entities: Raymond and Raymond Lifestyle. Raymond Ltd. underwent a significant transformation on Thursday, July 11th, 2024, as its lifestyle business officially separated through a demerger. This move aims to unlock greater value for investors by creating two focused companies: Raymond and Raymond Lifestyle (previously Raymond Consumer Care).
Raymond Demerges Details and Rationale
The record date for the demerger was set as July 11th, with Raymond Lifestyle expected to list on stock exchanges by the end of August or early September 2024. Shareholders of Raymond Ltd. on the record date will receive four (4) fully paid-up equity shares of Raymond Lifestyle (₹2 face value) for every five (5) fully paid-up equity shares of Raymond Ltd. (₹10 face value).
Analysts see this demerger as a strategic move to benefit investors. Prashanth Tapse, Research Analyst at Mehta Equities, believes it allows for “focused business plans for each segment” and potentially “greater value for investors.” Furthermore, the demerger is expected to leave both Raymond and Raymond Lifestyle debt-free, providing a solid financial foundation.
Growth Strategies for Raymond and Raymond Lifestyle
Following the Raymond Demerges will focus on its real estate and engineering businesses. Their annual report for FY24 indicates the company has exited the fast-moving consumer goods (FMCG) sector, solidifying its commitment to these core areas.
Meanwhile, Raymond Lifestyle is expected to drive growth through “EBO (Exclusive Brand Outlet) expansion” and “product expansion.” Reports suggest plans to open 250-300 new EBO stores in the next 12-18 months, significantly boosting their retail presence.
Analyst Outlook and Shareholder Value. Brokerage firm Motilal Oswal maintains a “buy” rating on Raymond stock. They estimate the per-share value of Raymond Ltd. to be around ₹1,415 after the demerger, with a breakdown of ₹1,200 for real estate and ₹215 for engineering. The brokerage firm also values the soon-to-be-listed Raymond Lifestyle at ₹2,930 per share.
Raymond Demerges signifies a new chapter for Raymond. With a focus on distinct business segments and potential for future growth, both Raymond and Raymond Lifestyle aim to create long-term value for their shareholders.
