Raymond Demerger: Last day to buy the stock to qualify for eligibility

Shares of Raymond surged nearly 6% to today's high of Rs 3,250 on the NSE, driven by anticipation of its upcoming demerger. Today marks the last day to buy shares to qualify for receiving shares of the new entity, Raymond Lifestyles, post-demerger and listing.

Following the record date on July 11, Raymond will trade ex-Raymond Lifestyles. The new entity is expected to be listed by August or September this year.

As part of this restructuring process, Raymond will demerge its lifestyle business into Raymond Lifestyle. Ray Global Consumer Trading will be amalgamated into Raymond Lifestyle to streamline the group structure.


Shareholders of Raymond will receive four equity shares of Raymond Lifestyle for every five shares held in Raymond. Shareholders of Ray Global Consumer Trading will receive two equity shares of Raymond Lifestyle for each share held in Ray Global Consumer Trading.

“Even the whole company with its real estate business, lifestyle, and engineering which is coming up very fast, which can grow very big in the defence and aerospace, the whole company put together their corporate office of 7,000 crores, so everything is quoting much below Manyavar today,” said ace investor
Porinju Veliyath, Managing Director at Equity Intelligence India.

If you remember when Manyavar was a Rs 22,000 crore company, Raymond was Rs 3,000 crore and this is value investing, recalls Veliyath.

Additionally, domestic brokerage firm InCred Equities also maintained an “add” rating on Raymond, increasing the target price to Rs 3,650 as they see the company’s multi-pronged value unlocking at play.

“Raymond’s management stated that once its businesses reach a certain scale, they will be made into pure-play entities. The next value-unlocking initiative is expected under the engineering division, after the acquisition of Maini Precision Products (MPPL) for Rs 6.82 bn, which will be split into two subsidiaries, one housing the aerospace & defence (A&D) business of MPPL and the rest consolidated under a single entity,” said a report by InCred Equities.

The Raymond group aims to double the A&D business, which currently garners Rs 270 crore in revenue over 3-4 years led by the aircraft components business, and targets to retain a 25-26% EBITDA margin, adds the InCred report.

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