Unlocking Value: Raymond to Spin Off Real Estate Business into Separate Listed Entity
Raymond Ltd to demerge real estate business, list realty vertical on exchanges to unlock value for shareholders and harness growth potential in Indian property market.
Real EstateDemergerRaymond LtdRaymond Realty LtdNational Company Law Tribunal NcltReal EstateJul 04, 2024
Each shareholder of Raymond Ltd will receive one share of Raymond Realty Ltd for every one share held in Raymond Ltd. The standalone operational revenue of the real estate division stood at Rs 1,592.65 crore in the last fiscal, accounting for 24% of the total revenue of Raymond Ltd.
The demerger is subject to the requisite approvals and sanction of the National Company Law Tribunal (NCLT) and the approval of shareholders and/or creditors, central government, or such other competent authority as may be directed by the NCLT. Upon the scheme coming into effect, Raymond Realty Ltd will issue 6,65,73,731 equity shares of Rs 10 each to the equity shareholders of Raymond Ltd.
The shares will be listed on the BSE Ltd and the National Stock Exchange of India (NSE). Raymond Ltd said the demerger will help attract a fresh set of investors/strategic partners to participate in the real estate business. The company aims to consolidate the entire real estate business of the group under one single entity, unlocking the value of the real estate business as a whole.
Raymond Realty Ltd has around 100 acres of land in Thane with approximately 11.4 million sq ft RERA-approved carpet area. The company has five ongoing projects worth Rs 9,000 crore on its Thane land, with an additional potential to generate more than Rs 16,000 crore, making a total potential revenue of over Rs 25,000 crore from this land bank.
The company has also launched its first joint development agreement (JDA) project in Bandra, Mumbai, and has signed three new JDAs in Mahim, Sion, and one more in Bandra East Mumbai, taking the combined revenue potential from four JDA projects in the Mumbai Metropolitan Region to over Rs 7,000 crore.
The development of Thane Land Bank and the current 4 JDAs gives a potential revenue of Rs 32,000 crore to the company. Raymond Ltd's Chairman cum Managing Director, Gautam Hari Singhania, said the demerger is in line with creating shareholder value creation.
'Having stated that now we have clear three vectors of growth at Raymond group i.e. lifestyle, real estate and engineering, this corporate action is in line with creating shareholder value creation,' Singhania said. 'The existing shareholders of Raymond Limited will get the shares in the new listed Real Estate company in a ratio of 1 1.'
Raymond Ltd is India's largest integrated worsted suiting manufacturer offering end-to-end solutions for fabric and garmenting. The group has a presence in the engineering space engaged in precision-engineered products with an expansive presence in national as well as international markets.
Frequently Asked Questions
Why is Raymond Ltd demerging its real estate business?
Raymond Ltd is demerging its real estate business to unlock value for shareholders and harness growth potential in the Indian property market.
What is the revenue potential of Raymond Realty Ltd?
The revenue potential of Raymond Realty Ltd is over Rs 32,000 crore from its Thane Land Bank and four JDA projects in the Mumbai Metropolitan Region.
What is the share ratio for the demerger?
Each shareholder of Raymond Ltd will receive one share of Raymond Realty Ltd for every one share held in Raymond Ltd.
Where will the shares of Raymond Realty Ltd be listed?
The shares of Raymond Realty Ltd will be listed on the BSE Ltd and the National Stock Exchange of India (NSE).
What is the purpose of the demerger according to Raymond Ltd's Chairman?
According to Raymond Ltd's Chairman, the demerger is in line with creating shareholder value creation and harnessing growth potential in the Indian property market.
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