Raymond Group's Strategic Demerger to Create Three Separate Listed Entities

Raymond Group, one of India's leading textile and apparel conglomerates, is moving forward with its strategic demerger plan that will result in the creation of three separate listed entities: Raymond Limited, Raymond Lifestyle Limited, and Raymond Realty Limited. The company announced that the shares of Raymond Lifestyle Limited are expected to be listed soon, following the completion of necessary formalities.

The company has clarified in a statement to stock exchanges on Tuesday, September 3, that the demerger of its lifestyle business is being executed through a composite scheme of arrangement. According to the statement, Raymond Lifestyle Limited will soon make its debut on the stock exchanges as part of the broader restructuring strategy. This move is aimed at unlocking greater value for shareholders by providing more focused business units under distinct entities.

Following an analyst meeting, domestic brokerages noted that the listing of Raymond Lifestyle Limited could take place during the first week of September 2024. The newly demerged lifestyle business is anticipated to double its EBITDA to over ₹20 billion by the financial year 2028, with an expected annual sales growth of 12-15% in the lifestyle segment.

In addition to the demerger of its lifestyle business, Raymond Limited has also separated its real estate division, forming a new entity named Raymond Realty Limited. The company stated in its regulatory filing to the Bombay Stock Exchange (BSE) that all formalities for the demerger were approved by the Board of Directors on July 4, 2024, and the necessary statutory and regulatory approvals are being pursued.

Upon completion of these formalities, the Raymond Group will comprise three publicly traded companies: Raymond Limited, which will focus on its core textile and engineering businesses; Raymond Lifestyle Limited, dedicated to the apparel and fashion segments; and Raymond Realty Limited, concentrating on the real estate market.

Brokerage firms have been closely following Raymond’s restructuring efforts, highlighting that shareholders will receive four equity shares of Raymond Lifestyle Limited for every five shares they currently hold in Raymond Limited. This approach is expected to provide a more transparent structure and enable each business segment to operate independently, enhancing shareholder value.

Motilal Oswal Financial Services has also commented on Raymond's active strategy to restructure its businesses, including selling its FMCG division, separating its lifestyle business, reorganizing its real estate assets, and setting up an engineering unit following the acquisition of Maini Precision. These steps are aimed at maximizing growth opportunities and improving the performance of each independent entity.

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With this new development, Raymond Group is positioning itself for a robust future, allowing each business to operate with greater autonomy and efficiency. The market is eagerly awaiting the listing of Raymond Lifestyle Limited and Raymond Realty Limited, which will mark a new chapter in the company's journey.

[Disclaimer: This article is for informational purposes only, based on publicly available information and analyst insights.]