On May 14, 2025, Raymond shares Ltd. experienced a significant drop of approximately 66%, Raymond share was trading at around ₹523.10 compared to the previous day’s close of ₹1,564.30. This sharp decline coincided with the ex-date for the demerger of its real estate arm, Raymond Realty. However, this plunge is a notional price adjustment reflecting the separation of the realty business, rather than a market sell-off.
Understanding the Demerger
The demerger allows Raymond Realty to operate as an independent entity, enabling it to focus solely on its real estate ventures. This strategic move is aimed at unlocking value for shareholders by allowing each business to pursue its growth trajectory independently. Post-demerger, shareholders will receive one share of Raymond Realty for every share held in Raymond Ltd.
Raymond Realty’s Growth Prospects
Raymond Realty has demonstrated strong financial performance, with a focus on the Mumbai Metropolitan Region (MMR) through joint development agreements (JDAs). In April 2025, the company signed a JDA for a residential project in Mumbai, with an estimated revenue potential of ₹5,000 crore. The demerger positions the realty business to capitalize on the growing demand in the real estate sector, particularly in the MMR. The company is expected to be listed by the second quarter of fiscal year 2025-26 (Q2 FY26), providing more clarity and value to shareholders.
Investor Implications
For investors, the immediate drop in Raymond’s share price reflects the removal of the real estate business’s value from the parent company’s valuation. Shareholders will now hold equity in both Raymond Ltd and the newly carved-out Raymond Realty, aligning with the value previously embedded in Raymond Ltd’s stock. This restructuring is anticipated to unlock shareholder value over the long term, as both entities can now focus on their core competencies.
Strategic Transformation
The demerger of Raymond Realty is part of Raymond Group’s larger strategic overhaul aimed at unlocking value by creating focused verticals. In September 2024, the company had already demerged and listed its lifestyle business as part of this transformation plan. These strategic moves reflect Raymond’s commitment to restructuring its business model to enhance operational efficiency and shareholder value.
Conclusion
The 66% decline in Raymond Ltd’s share price is a technical adjustment due to the demerger of Raymond Realty. This strategic move is expected to benefit shareholders by allowing both companies to operate independently, focusing on their respective growth strategies. Investors are advised to consider the long-term potential of holding equity in both entities as they embark on their individual growth trajectories.
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