Raymond Shares Drop 66% as Company Turns Ex-Date for Realty Demerger
| 2025-05-14
Raymond shares plunged by 66% on Wednesday (May 14, 2025)
Raymond shares fell 66% after the stock turned ex-date for its real estate demerger. Shareholders will receive equity in the newly formed Raymond Realty.
Raymond shares plunged by 66% on Wednesday after the Indian conglomerate’s stock turned ex-date for the demerger of its real estate arm, Raymond Realty, which is set to operate as an independent listed entity.
The stock of Raymond Ltd., a major player in India’s textile and real estate sectors, dropped to ₹530 per share from its previous close of ₹1,561.30, marking a 52-week low. The sharp decline coincided with the ex-date of the company’s spin-off of Raymond Realty Ltd.
What the Demerger Means
The ex-date is the first day when shares of Raymond Ltd. trade without the entitlement to shares in the newly demerged company, Raymond Realty. As a result, the share price of the parent company adjusted to reflect the separation of the real estate business from its balance sheet.
Despite the apparent loss in Raymond’s stock value, investors are not facing actual losses in their total holdings. Shareholders will receive one share of Raymond Realty for each Raymond Ltd. share they own, meaning they will soon hold equity in two distinct companies. The listing of Raymond Realty on Indian stock exchanges is expected in the September quarter of the 2025–26 financial year.
Some mobile trading applications may not yet reflect the adjusted pricing, potentially leading to confusion among retail investors who see a sudden drop of over 60%.
Strategic Rationale Behind the Demerger.
Raymond Ltd. announced the plan to demerge its real estate operations in July 2024, stating the move was intended to unlock shareholder value and enable each business to focus on its core competencies. The company received formal approvals from the Bombay Stock Exchange and the National Stock Exchange later that year.
Gautam Hari Singhania, Chairman and Managing Director of Raymond Ltd., said: “This strategic move emphasizes our commitment to drive sustainable growth via pure-play business and further enhance shareholder value.”
Following the scheme of arrangement, Raymond Realty will issue over 67 million equity shares with a face value of ₹10 each to Raymond’s shareholders. In parallel, Raymond Ltd.'s shareholding in the real estate unit will be cancelled, leaving the two entities fully independent.
Raymond Realty's Performance and Outlook
Raymond Realty reported strong financial performance in the last quarter of the 2024–25 fiscal year. It posted revenue of ₹766 crore, an increase of 13% from the same period the previous year. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) stood at ₹194 crore, with an EBITDA margin of 25.3%.
The business also registered a booking value of ₹636 crore, driven by several projects, including The Address by GS 2.0, Invictus, and Park Avenue – High Street Retail in Thane, as well as a joint development agreement (JDA) project in Bandra, Mumbai.
Raymond Realty reported a net cash surplus of ₹399 crore post-demerger. The company has expanded its footprint beyond Thane by signing additional JDAs in Mumbai’s Mahim and Wadala neighbourhoods, valued at a combined ₹6,800 crore. With these additions, Raymond Realty now has six projects underway outside Thane.
Past Demergers and Broader Strategy
This latest move follows the successful demerger of Raymond Lifestyle, the group’s apparel business, which was listed on Indian exchanges in September 2024. The broader restructuring reflects the group’s intention to create vertically focused entities capable of independent growth and market responsiveness.
By operating separately, Raymond Ltd. and Raymond Realty are expected to benefit from streamlined governance, better capital allocation, and clearer investor value propositions. The group has stated that the split will allow both companies to pursue tailored growth strategies in the textile and real estate sectors, respectively.
Industry Context
Raymond’s demerger aligns with a wider trend among Indian conglomerates seeking to improve shareholder transparency and performance by dividing diversified operations. India’s real estate sector, particularly in urban regions like the Mumbai Metropolitan Region (MMR), has seen growing demand amid infrastructure development and increasing urbanisation.
Raymond Realty’s strategic focus on timely project execution, land bank utilisation, and urban expansion positions it to compete with established players in the competitive Mumbai market.
Meanwhile, Raymond Ltd., post-demerger, is expected to strengthen its position in the textile and garment sectors, where it enjoys strong brand recognition through labels like Park Avenue, ColorPlus, and Raymond Ready-to-Wear.
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