Raymond Realty Takes Flight: Demerger to Unlock Real Estate Potential
Raymond Realty, a subsidiary of Raymond Limited, is set to operate as a separate listed entity, leveraging an asset-light model and charting its own growth path.
Real EstateRaymond RealtyDemergerJoint Development AgreementMumbai Metropolitan RegionReal Estate MumbaiJul 04, 2024
The real estate business has reported a revenue of ₹1,593 crore, a 43% year-on-year growth, and EBITDA of ₹370 crore in FY24. This strong performance has positioned it well to chart its own growth path as a separate entity. Raymond Realty boasts a significant land bank of around 100 acres in Thane, with approximately 11.4 million square feet of RERA-approved carpet area. About 40 acres of this land are currently under development, with five ongoing projects worth ₹9,000 crore.
In addition to its Thane land bank, Raymond Realty has also launched its first joint development agreement (JDA) project in Bandra, Mumbai. The company has signed three more JDAs in Mahim, Sion, and Bandra East, Mumbai, taking the combined revenue potential from these four JDA projects in the Mumbai Metropolitan Region to over ₹7,000 crore. With the development of its Thane land bank and the four JDAs, Raymond Realty has a potential revenue of ₹32,000 crore.
According to Gautam Hari Singhania, chairman and managing director of Raymond, '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 an automatic route is another step to enhance shareholder value.' The existing shareholders of Raymond Limited will receive shares in the new listed real estate company in a ratio of 1 1.
The demerger aligns with Raymond Group's stated objectives of simplifying its corporate structure and enhancing shareholder value for operational and structural benefits. By 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.
Information Raymond Limited is India's largest integrated worsted suiting manufacturer that offers end-to-end solutions for fabric and garmenting. The company has some of the leading brands within its portfolio, including 'Raymond Ready to Wear', 'Park Avenue', 'ColorPlus', 'Parx', 'Raymond Made to Measure', and 'Ethnix by Raymond', among others. Raymond has about 1,450 stores in more than 600 towns and has forayed into the realty sector through the launch of its maiden project Ten X Habitat spread across 14 acres, housing around 3,100 residential units.
Raymond Realty Limited (RRL) is a wholly owned subsidiary of Raymond Limited, a leading Indian multinational corporation. RRL is focused on developing premium residential projects in key locations across India.
Frequently Asked Questions
What is the purpose of the demerger of Raymond's real estate business?
The demerger is aimed at creating shareholder value and simplifying the corporate structure of Raymond Limited.
How many shares of Raymond Realty will each Raymond shareholder receive?
Each Raymond shareholder will receive 1 share of Raymond Realty for every 1 share held in Raymond.
What is the revenue potential of Raymond Realty's Thane land bank and JDA projects?
The revenue potential is approximately ₹32,000 crore.
What is the current status of Raymond Realty's projects in Thane?
About 40 acres of the 100-acre land bank are currently under development, with five ongoing projects worth ₹9,000 crore.
What is the significance of the joint development agreement (JDA) model for Raymond Realty?
The JDA model allows Raymond Realty to leverage an asset-light model, reducing its capital expenditure and increasing its revenue potential.
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