On Thursday, July 4, 2024, Raymond Limited announced a major change in their company’s current structure. Raymond Limited’s board has approved the separation of its real estate business into a new company, Raymond Realty Limited. Each Raymond shareholder will receive one Raymond Realty share for each share of Raymond Limited they hold. There will be no cash involved in this transaction.
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Listing on BSE and NSE
After the split, Raymond Realty will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). Shares of Raymond Limited ended the day at INR 2,935.45 on BSE. They were down by INR 26.30 or 0.89%.
Approval and Process
This decision for the split was recommended by the Audit Committee and was approved by the board. The demerger is subject to approvals from the National Company Law Tribunal (NCLT), shareholders, creditors, the central government and other authorities.
Previous Scheme of Arrangement
This move follows a recent arrangement involving Raymond Limited, Raymond Lifestyle Limited and Ray Global Consumer Trading Limited. This earlier scheme was approved by the NCLT on June 21, 2024. It became effective on June 30, 2024.
New Shares Issuance
Upon the demerger, Raymond Realty Limited will issue 66,573,731 equity shares. These shares having a face value of INR 10 each will be issued to Raymond Limited shareholders. They will be listed on BSE and NSE after receiving the necessary approvals.
Raymond Realty’s Growth
Raymond’s real estate business has shown significant growth. In the fiscal year 2024, it has reported a revenue of INR 1,593 crore. This shows a 43% year-on-year growth and an EBITDA of INR 370 crore. Raymond Realty owns 100 acres of land in Thane. About 40 acres of that land is currently under development.
Ongoing and Future Projects
Raymond Realty is working on five projects in Thane worth INR 9,000 crore. These projects have the potential to generate over INR 25,000 crore in revenue. Raymond Realty has also launched its first joint development agreement (JDA) project in Bandra, Mumbai. They have also signed three new JDAs in Mahim, Sion and Bandra East. The combined potential revenue from these JDAs is estimated to be over INR 7,000 crore. The total potential revenue from all these current projects is estimated at INR 32,000 crore.
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Raymond Limited’s decision to demerge its real estate unit into Raymond Realty Limited shows their aim to segregate operations. They are going to focus heavily on growth of the ongoing and future projects.
About the Author
Mr. Radhesh Tarang Shah, is a management student at Institute of Management, Nirma University. He has a passion for writing articles and poems. He has experience as a financial analyst, author, news writer, marketer and social worker.
