Shares of Raymond Ltd shot up 18% and hit a 52-week high of Rs 3,484 on 5 July after the Board of Directors of the company approved the demerger plan for its real estate business to unlock the value for its shareholders and harness the growth potential of the Indian real estate market. 

The demerger plan aims to consolidate the company’s entire real estate business vertical into a single entity to leverage the growing opportunities, and attract new investors and strategic partners. 

In its regulatory filing, the company said the demerger of its real estate business into its wholly-owned subsidiary, Raymond Realty, which will be listed as a separate entity within the Raymond Group after receiving all necessary statutory approval. 

Under the plan, the company will issue 6.65 crore shares of Raymond Realty with a face value of Rs 10 per share. Shareholders of the company will receive one share of Raymond Realty for every share held in Raymond with no cash or alternative consideration involved. 

The filing added, “This strategic move comes as Raymond’s Real Estate Business has achieved scale, reporting revenue of Rs 1,593 crore (43 percent on year growth) and EBITDA of Rs 370 crore in FY24, positioning it well to chart its own growth path as a separate entity.”

The company added, “Raymond Realty has 100 acres of land in Thane with 11.4 mn sq ft RERA approved carpet area of which about 40 acres is currently under development. There are 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.”

Earlier last year, the company had demerged its lifestyle business to Raymond Consumer Care in an effort to become debt free. 

At 2:12 m, the shares of Raymond were trading % higher at Rs 3,266.90 on NSE.