Shares of Raymond rose on Friday after the company announced it would spin off its real estate business. Raymond Real Estate.
What happened: The aim of this step is to increase the value of the real estate business and to attract new investors and strategic partners by consolidating the entire real estate business into a single company.
The company plans to issue 6.65 crore shares of Raymond Realty with a face value of ₹10 per share. Upon completion, shareholders will receive one Raymond Realty share for every Raymond Ltd share they hold. There will be no cash or any other form of consideration.
Raymond Realty will be listed on both the National Stock Exchange and the Bombay Stock Exchange.
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Unlocked value: Raymond Realty owns 100 acres of land in Thane with 11.4 million square feet of residential space approved under the Real Estate (Regulation and Development) Act. About 40 acres are currently under development with five ongoing projects worth Rs 9,000 crore and an additional potential of over Rs 16,000 crore, making a total potential revenue of over Rs 25,000 crore from this land reserve.
Recently, Raymond Realty launched its first Joint Development Agreement (JDA) project in Bandra, Mumbai and signed three more in Mahim, Sion and another in Bandra East, Mumbai. These four JDA projects together have a revenue potential of over Rs 7,000 crore. Together with Thane Land Bank and the current JDAs, the company expects a potential revenue of Rs 32,000 crore.
The spin-off will enable independent capital allocation and balance sheet management tailored to the specific needs of each company.
Last year, Raymond announced the spin-off of its lifestyle business from Raymond Consumer Care to create a publicly traded company focused on a pure B2C lifestyle business with the goal of becoming net debt-free.
Price promotion: Raymond’s share price rose 5.31% to ₹3,096.15 shortly before the start of trading on Friday.
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