'Managed to kill three birds with one stone': Raymond's Gautam Singhania on Godrej deal

"I have managed to kill three birds with one stone," said Gautam Singhania, chairman and managing director of Raymond Limited, talking about the Rs 2,825-crore deal that he struck with Godrej Consumer Products on Thursday.

The deal transfers brands like KS, Kamasutra and Park Avenue deodorants to GCPL. "I say three birds have been killed with this deal, because firstly we have managed to sell the business, the proceeds of which shall make the lifestyle business net debt free and we will be strengthening the group business with the demerger and subsequent listing of the lifestyle business," Singhania explained.

At a time when men's wellness and grooming brands like Kamasutra and Park Avenue have emerged as brands that have been working well for the company, so when asked about the reason behind selling them, Singhania retorted, "Why not?"

He said, "We are in the business of making money. So, this was a great opportunity, for Godrej and us. We have been wanting to sell this business for a while but it happened when it had to."

Singhania also explained that the deal creates value for the shareholders of the company and that's his priority. "This is also a great way to demonstrate that we are not emotionally attached with business while we have emotions for our business. However, for the right price everything is up for sale," he added.

The group has sold its business to GCPL but has retained its biggest condom manufacturing plant in Maharashtra's Aurangabad. "We will manufacture and supply condoms to GCPL for Kamasutra and to some other international clients," explained Group CFO Amit Agarwal.

With this sale, Park Avenue as a brand will have two offerings, one in the men's grooming segment and other as a suiting, shirting brand. Interestingly, both the brands will not be under different groups. Further, the shirting vertical within Raymond has been demerged and will be listed as separate entity as RCCL on the bourses. "The brand Park Avenue will help both the parties, us and GCPL and nothing changes for the consumer. So, it's a win for all," Singhania explained.

Raymond Limited's focus will now purely be in real estate. With its initial phase construction seeing a positive response near Mumbai's Thane, which is also Raymond's second home, the company is optimistic about the business. "Real estate will become a very serious business for us. Initial phases have been a success, more are coming up and after that joint development will be the way forward," Singhania explained.