Raymond’s Lifestyle Business Demerger Leads to 40% Stock Drop but Promises Enhanced Value in the Future

Raymond shares took a sharp downward spiral, plunging 40% during trading hours as the company marked the record date for the demerger of its lifestyle division. This move signaled the separation of Raymond’s core business, excluding its lifestyle segment, with the demerged Lifestyle unit set to be listed independently on stock exchanges in the coming months.

Experts from financial firms such as MOFSL and Arihant Capital Markets have projected varying valuations for the newly formed entities post the demerger. MOFSL estimated a per-share value of ₹1,415 for Raymond Ltd after considering real estate and engineering business components, while expecting the Lifestyle business to list at around ₹2,930 per share.

InCred Equities, on the other hand, valued Raymond’s Lifestyle business at ₹1,982 per share, with the realty division at ₹1,086 and the engineering business at ₹499 per share.

This strategic demerger is part of Raymond’s larger plan to separate its real estate segment in the next 15-18 months, leaving the entity focused solely on the Engineering sector. An exchange ratio of 4:5 has been established for the Lifestyle listing and 1:1 for the upcoming real estate listing.

Arihant Capital Markets highlighted the significant growth potential in Raymond’s real estate division, with ongoing development in Thane‘s 40 acres projected to generate a revenue potential of around ₹25,000 crore over eight years. The engineering business is also poised for growth, particularly with the recent acquisition of MPPL, which promises substantial value unlocking in aerospace and defense segments.

The engineering arm, comprising Raymond Engineering and MPPL, is expected to double revenues over the next few years. With strong ties to key players like HAL and global giants Boeing, Airbus, and Comac, Raymond’s Engineering business is geared towards a phase of heightened demand and expansion.