Raymond share: 66% fall! Why stock bled amid Raymond Realty demerger

Shares of Raymond Ltd fell 66 per cent in Wednesday's trade, as the stock turned ex-date for demerger of Raymond's real estate business -- Raymond Realty. The Raymond stock was trading 66.05 per cent lower at Rs 530 against its previous close of Rs 1,561.30 apiece, as the stock is not factoring in real estate business into Raymond's fundamentals now.

Today is the record date for the purpose of determining the eligible shareholders of Raymond to whom the equity shares of the Raymond Realty would be allotted in terms of the scheme. Raymond Realty got demerged from Raymond on May 1. Earlier Raymond demerged its lifestyle business Raymond Lifestyle. That business got listed on stock exchanges in September 2024.

Raymond announced that each of its shareholders would receive one share of the newly formed Raymond Realty for every Raymond share they hold, a strategic move aimed at enhancing shareholder value. The listing of the real estate business is likely by the September quarter. 

It is possible that some of the mobile trading apps might still be showing unadjusted price of Raymond and, hence, the 66 per cent drop.

In the fourth quarter of FY25, Raymond Realty reported a booking value of Rs 636 crore, driven by projects such as The Address by GS 2.0, Invictus, and Park Avenue – High Street Retail in Thane, alongside JDA project 'The Address by GS' in Bandra. The business delivered a revenue of Rs 766 crore, marking a 13% increase over the previous year, with an EBITDA of Rs 194 crore and a margin of 25.3%.

The demerger leaves the real estate business net cash surplus with Rs 399 crore. "This strategic move emphasizes our commitment to drive sustainable growth via pure play business and further enhance shareholder value," stated Gautam Hari Singhania, Chairman and MD of Raymond. "We continue to expand our portfolio through the JDA route in this quarter, having signed two additional JDAs in Mahim and Wadala aggregating to Rs 6,800 crore."

These JDAs are part of Raymond Realty's efforts to broaden its footprint beyond Thane, now totalling six projects outside the region. The Mahim and Wadala projects are expected to contribute significantly to future growth and consolidate Raymond Realty's status as a major player in the Mumbai Metropolitan Region (MMR).

Raymond Realty aims to focus on delivering projects within committed timelines and achieving sustainable growth.

The planned demerger underscores the company's intention to enhance operational efficiencies, leverage its substantial land bank assets, and optimise growth in the competitive real estate market. The move is expected to reinforce the long-term growth trajectory of Raymond Realty, as it continues to adapt and thrive in the evolving real estate landscape.