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Raymond Group Demerger its Business Verticals

Raymond Group announces the demerger of its real estate business into a separate listed entity, Raymond Realty Limited, to unlock shareholder value and enhance operational focus across its lifestyle, real estate, and engineering verticals. 

by Damodharan N

Updated Jul 09, 2024

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Raymond Group Demerger its Business Verticals

In a strategic move to unlock shareholder value and enhance operational efficiency, the Raymond Group has announced the demerger of its real estate business into a wholly-owned subsidiary, Raymond Realty Limited (RRL). 

The demerger will result in three distinct listed entities within the Raymond Group: Raymond Ltd. (RL) for lifestyle businesses, RRL for real estate, and separate companies for the engineering and auto businesses.

The real estate business, which reported revenue of ₹1,593 crore in FY24 (43% YoY growth) and EBITDA of ₹370 crore, has achieved significant scale and is well-positioned for independent growth. The demerger will simplify the group structure, create operational efficiencies, and allow each business to pursue its own growth strategies based on industry-specific dynamics and investment requirements.

Under the demerger scheme, each existing shareholder of Raymond Ltd. will receive one share of RRL for every share held in RL. This 1:1 ratio will ensure that shareholders benefit from the value creation in the real estate business.

The demerger will also result in the creation of three distinct vectors of growth for the Raymond Group: lifestyle (branded textiles, apparel, garmenting, and high-value cotton shirting), real estate (Thane land development with ₹25,000 crore+ revenue potential and four joint development projects in the Mumbai Metropolitan Region with ₹7,000 crore+ revenue potential), and engineering (comprising JK Files, Auto RPAL, MPPL, and aerospace and defense businesses with a proforma revenue of ₹1,800 crore in FY24).

Chairman and Managing Director Gautam Hari Singhania stated that the demerger aligns with the group's strategy of creating shareholder value and enhancing the focus of each business. The automatic listing of RRL will provide focused investor opportunities and better access to capital for the real estate business.

Read the full Release Here 

Raymond Realty

Raymond Realty, a significant player in the Mumbai Metropolitan Region (MMR), is making substantial strides in the real estate sector. The company's leadership team is noted for its strength and commitment, ensuring that Raymond Realty remains at the forefront of the industry.

This is further supported by a substantial landbank of 100 acres owned by the company and an asset-light model through four Joint Development Agreements (JDAs).

Raymond Realty's achievements are underscored by significant figures. The company has RERA-approved carpet areas totaling approximately 11.4 million square feet and has delivered three towers two years ahead of the RERA timeline.

Their land development and JDA-led business model cover approximately 40 acres under development, with an estimated revenue of ₹9,000 crore. Further potential development spans 60 acres with a projected revenue of ₹16,000 crore.

In Thane alone, the company has a potential revenue of over ₹25,000 crore from its 100-acre land. The asset-light expansion model through JDAs has launched projects in high-demand areas such as Bandra East, Mahim, Sion, and Bandra MIG, with estimated revenues ranging from ₹1,400 crore to ₹2,000 crore each.

Financial Performance

Raymond Realty's financial metrics highlight its market success. The company has achieved over ₹6,000 crore in bookings and customer collections exceeding ₹4,100 crore. The total revenue potential from current projects is projected to surpass ₹32,000 crore.

Recent Developments and Future Prospects

In the fiscal year 2023-24, Raymond Realty has seen continued growth. Key performance indicators for Q4 FY24 show 542 bookings with a RERA carpet area of 0.31 million square feet, valued at ₹663 crore, and customer collections of ₹897 crore.

Project-to-date figures are equally impressive, with 2,810 bookings, 1.53 million square feet of RERA carpet area, ₹2,974 crore in booking value, and ₹2,712 crore in customer collections.

Additionally, various projects under development reflect robust planning and execution. For example, the development in Thane includes 10 towers with a RERA carpet area of 1.7 million square feet and 3,103 planned units.

Another notable project includes two towers with a RERA carpet area of 0.7 million square feet, 551 planned units, and a 91% sales rate. Raymond Realty's comprehensive strategy, strong financial performance, and robust project pipeline highlight its significant role in the MMR real estate market

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Raymond Limited 

Raymond Limited is a diversified conglomerate with its core business in textiles and apparel. Established in 1925 as the Raymond Woolen Mill, the company has evolved into a textile powerhouse with expertise in producing a wide range of fabrics, including worsted, cotton, wool blends, linen, and denim.

Over the years, Raymond has diversified into consumer care, real estate, and engineering businesses, while maintaining its reputation for quality, elegance, and innovation. Under the leadership of Gautam Singhania, Raymond became the first textile company in the world to produce Super 250s and other innovative fabrics.

Today, Raymond is a leading player in the B2B garment manufacturing space, exporting to over 60 countries, and is also a prominent player in the Indian retail market through its iconic brands like Park Avenue, Raymond Ready to Wear, ColorPlus, and Parx Ethnix. 

Raymond Group Demerger its Business Verticals - FAQs

1. What is the total revenue potential from Raymond Realty's current projects?  

The total revenue potential from Raymond Realty's current projects is projected to surpass ₹32,000 crore.

2. What was the revenue and EBITDA of Raymond Realty's business in FY24?  

Raymond Realty reported revenue of ₹1,593 crore in FY24, a 43% year-on-year growth, and EBITDA of ₹370 crore.

3. How much is the total land bank owned by Raymond Realty?  

Raymond Realty has a land bank of around 100 acres.

4. What is the estimated revenue potential from Raymond Realty's Thane land development project?  

The Thane land development project has a revenue potential of over ₹25,000 crore.

5. What is the estimated revenue potential from Raymond Realty's four joint development projects in the MMR region?  

The four joint development projects in the MMR region have a combined revenue potential of over ₹7,000 crore.

6. What is the total value of bookings achieved by Raymond Realty so far?  

Raymond Realty has achieved over ₹6,000 crore in bookings.

7. What is the total amount of customer collections received by Raymond Realty?  

Raymond Realty has received customer collections exceeding ₹4,100 crore.

8. What was the RERA carpet area booked in Q4 FY24?  

In Q4 FY24, Raymond Realty booked 0.31 million square feet of RERA carpet area.

9. What was the value of bookings in Q4 FY24?  

The value of bookings in Q4 FY24 was ₹663 crore.

10. What were the customer collections in Q4 FY24?  

The customer collections in Q4 FY24 were ₹897 crore.

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