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Raymond stock price trades outside lifestyle business; hits 5% upper circuit from uncovered price
Raymond The share price in Thursday’s session was locked in an upper circuit of 5% as the stock turned ex-date for the lifestyle company. Raymond’s share price opened today at ₹1,950 on the BSE after a special pre-open price discovery session between 09:45 am and 10 am today. The stock touched an intraday high of ₹2,047.45 apiece on the BSE and an intraday low of ₹1,852.50.
Raymond has set July 11, 2024 as the record date for the demerger of its lifestyle business venture into Raymond Lifestyle (formerly Raymond Consumer Care) and to establish the entitlement of the shareholders of the Company. Four (4) fully paid equity shares of Raymond Lifestyle of ₹2 each will be issued and allotted to the shareholders of Raymond holding five (5) fully paid equity shares of ₹10 each as on the record date.
“Raymond has today announced its demerger action in its Lifestyle business. The demerged Lifestyle business of Raymond has been separated and would be listed separately on the stock exchanges by end-August or early-September 2024. As per the demerger (share swap ratio of 4:5). We believe this move is aimed at unlocking greater value for investors and focused business plans for each segment. As per the demerger assumption post demerger, all businesses are expected to be net debt free. As a long-term investor, this corporate restructuring of demerger is part of unlocking value for shareholders and we remain positive on the corporate action,” said Prashanth Tapse, Research Analyst, Senior Vice President, Research, Mehta Equities.
According to a recent report by brokerage Motilal Oswal Financial Services, the record date for the demerger was July 11, and the company expects the lifestyle division to be listed in the next two months. EBO and product expansion will be the driving forces behind the lifestyle segment growth strategy. EBO will expand by opening 250-300 more stores over the next 12-18 months.
To unlock value for its shareholders, the company has taken the corporate action of separating the Lifestyle division from Raymond. Following the demerger, there will be two listed companies: Raymond Lifestyle and Raymond. Raymond will oversee the real estate and engineering businesses.
According to reports, Raymond said in its annual report for fiscal year 2024 that the Group has sold its fast-moving consumer goods (FMCG) division and has now selected the three core sectors of Lifestyle, Real Estate and Engineering as pillars for future development. With the separation of the Lifestyle business into a separate corporation, Raymond’s parent company will now include the Real Estate and Engineering sectors. This corporate activity, with the intention of increasing shareholder value, brings them to the brink of a new beginning.
Brokerage firm Motilal Oswal has maintained a ‘buy’ rating on the stock. The brokerage expects Raymond Ltd’s per share valuation to be around ₹1,415 (valuation of ₹94 billion) post the listing date (July 11, 24), which includes ₹1,200 from real estate and ₹215 from the engineering business. The lifestyle business could list at around ₹2,930/share.
Disclaimer: The above opinions and recommendations are those of individual analysts, experts and brokers, not Mint. We advise investors to consult certified experts before making any investment decisions.
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