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Raymond Group Declares Major Realty Demerger Focuses on New Growth Vectors

Textiles and apparel giant Raymond Ltd has officially announced on Thursday that its board of directors has sanctioned the demerger of its thriving real estate division, Raymond Realty Ltd. This strategic move aims to capitalize on the growing potential of the real estate sector and bring in a fresh cohort of investors and strategic partners, thereby consolidating Raymond Group’s entire real estate operations under a single, streamlined entity. This pivotal update was shared by the company in a formal filing with the stock exchanges.

The demerger terms outline that existing shareholders of Raymond Ltd will be entitled to receive one equity share of Raymond Realty for every share they hold in Raymond. Moreover, the newly formed entity, Raymond Realty, will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), thereby broadening its market visibility and accessibility.

“This strategic move comes as Raymond’s real estate business has achieved scale, reporting revenue of Rs 1,593 crore, which reflects a notable 43 percent year-on-year growth,” the company stated in a press release. Raymond Realty currently holds an impressive 100 acres of land in Thane, with approximately 40 acres actively under development. The company is spearheading five ongoing projects in Thane, which collectively are valued at Rs 9,000 crore. Furthermore, these projects, combined with future development potential, are expected to generate over Rs 16,000 crore, thus contributing to a total potential revenue exceeding Rs 25,000 crore from this substantial land asset.

The company has recently launched its inaugural joint development agreement (JDA) project in the upmarket area of Bandra, Mumbai, marking a significant milestone for Raymond Realty. Additionally, Raymond has entered into three new agreements in Mahim, Sion, and another one in Bandra East, all situated in Mumbai. These strategic expansions are expected to cumulatively generate over Rs 7,000 crore in revenue from the four JDA projects within the Mumbai Metropolitan Region, enhancing the company’s real estate footprint.

Gautam Hari Singhania, Chairman and Managing Director of Raymond Limited, emphasized the strategic rationale behind the demerger. “Now we have clear three vectors of growth at Raymond group, i.

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.e., Lifestyle, Real Estate, and Engineering. This corporate action is in line with creating shareholder value,” Singhania stated, underscoring the group’s multifaceted growth strategy.

Raymond Realty’s demerger reflects the company’s commitment to leveraging the booming real estate market, especially in metropolitan areas like Mumbai, where land values and demand for premium residences are perpetually escalating. The company’s strategic expansion in land-rich areas like Thane and key urban localities within Mumbai is poised to generate substantial long-term value for its stakeholders.

The officially sanctioned demerger is set to bolster Raymond Realty’s operational independence, allowing for more focused management and operational agility. By segregating its burgeoning real estate division from its traditional textiles and apparel businesses, Raymond aims to attract specialized investors and strategic partners capable of contributing to and enhancing the real estate business’s growth trajectory.

To put it into context, Raymond Ltd’s real estate operations have displayed robust growth dynamics, outpacing many of its competitors in the sector. The Thane land bank alone is a testament to this growth, with its projects not only contributing significant revenue but also positioning Raymond Realty as a formidable player in the region’s real estate market.

Beyond Thane, the company’s strategic agreements in Mumbai’s high-demand areas like Bandra, Mahim, and Sion further solidify its market position. These new projects are expected to resonate with the upper echelons of Mumbai’s property market, attracting discerning investors and homebuyers seeking premium properties in prime locations.

In conclusion, the demerger of Raymond Realty signifies a strategic recalibration by Raymond Ltd, designed to unlock value and foster growth across its diversified business portfolio. By listing Raymond Realty independently on major stock exchanges like BSE and NSE, the group aims to enhance transparency, improve market perception, and ultimately deliver greater value to its shareholders. As Raymond Ltd aligns its business interests with market opportunities, this demerger marks a pivotal development in the group’s ongoing evolution and growth strategy.