Raymond’s Demerger Drama: Share Price Tumbles 40% Overnight

Today, Raymond Ltd experienced a sharp decline of 40% in its share price as it began trading ex-date for the demerger of its lifestyle business. This significant drop saw the stock open at Rs 1,906 on the NSE, down from its previous day’s closing value of Rs 3,156.10. However, as the trading session progressed, the stock recovered slightly and was trading at Rs 2,009.80, reflecting a 3.07% increase from its opening price.

The demerger of the lifestyle business means that Raymond’s shares now exclude the value of this separated entity, which is slated to be listed independently on stock exchanges between August and September. As part of this corporate action, existing shareholders will receive four shares of Raymond Lifestyle for every five Raymond shares they hold, with today marking the record date for this distribution.

Financial analysts have estimated the per-share values post-demerger, with MOFSL valuing Raymond Ltd at Rs 1,415 per share. This assessment includes Rs 1,200 per share attributed to the real estate segment and Rs 215 per share for the engineering business. Meanwhile, domestic brokerage InCred Equities has appraised the fair value of the lifestyle business at Rs 1,982 per share, the realty business at Rs 1,086 per share, and the engineering business at Rs 499 per share.

Looking ahead, Raymond plans to further unlock value by demerging its real estate business, a process expected to take 15-18 months to complete. Post this demerger, Raymond will focus solely on its engineering business, aiming to maximize value for shareholders through strategic restructuring and focused growth initiatives in the aerospace and defense sectors.