Raymonds, a reputable textile and clothing company, has recently announced a significant change in its business structure, resulting in a more than 4% increase in its stock value. The company has made the decision to exclude the value of its Lifestyle business from its shares, which has led to a rise in its implied base value on both the Bombay Stock Exchange and the National Stock Exchange.
The restructuring involves the demerger of Raymonds’ lifestyle business into a new entity called Raymond Lifestyle. Additionally, Ray Global Consumer Trading will be amalgamated into Raymond Lifestyle to simplify the overall group structure. Shareholders of Raymond will receive four equity shares of Raymond Lifestyle for every five shares held in Raymond, while shareholders of Ray Global Consumer Trading will receive two equity shares of Raymond Lifestyle for each share held in the former.
According to a filing to the exchanges, “RLL shall issue and allot 4 (Four) fully paid-up equity shares of RLL having a face value of Rs 2/- each for every 5 (Five) fully paid-up equity shares of Rs 10/- each of RL to the shareholders of the Company whose names are recorded in the register of members and/or records of the depository as on the Record Date (i.e., Thursday, July 11, 2024).” The company has also provided guidance on how to determine the cost of acquisition of the equity shares of Raymond and Raymond Lifestyle post-demerger.
Notably, ace investor Porinju Veliyath, Managing Director at Equity Intelligence India, commented on the restructuring, stating, “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.” He also emphasized the potential for significant growth in Raymond’s real estate, lifestyle, and engineering businesses.
The move by Raymonds to restructure its business has drawn interest from investors and market experts alike. Veliyath referenced the potential value of the company and compared it to the success story of Manyavar, underscoring the concept of value investing in the context of Raymond’s future growth.
It’s important to note that the views expressed by experts do not necessarily represent those of Economic Times and should be considered as their personal opinions.
In conclusion, the recent restructuring of Raymond’s business has created a buzz in the stock market, leading to a substantial increase in its stock price. The company’s decision to separate its lifestyle business and streamline its group structure has generated interest and excitement among investors and market observers.
This also reflects the company’s potential for growth and diversification, particularly in the real estate, lifestyle, and engineering sectors. The future listing of Raymond Lifestyle is highly anticipated, and all eyes will be on Raymond as it enters this new phase of development and expansion.