The demerger is aimed at exploiting the growth potential of the real estate business and attract a fresh set of investors to participate in the realty business, consolidate the entire real estate business of the group under one single entity.
Under the proposed scheme, stock holders will get 1 share of Raymond Realty for every 1 share of Raymond.
The proposed restructuring of the realty business is expected to benefit in a number of ways, according to the company. The real estate business undertaking and the remaining undertaking have their own set of strengths and dynamics in the form of nature of risks, competition, challenges, opportunities and business methods, leading to different growth potentials.
“Hence, segregation of the two undertakings would enable a focused management to explore the potential business opportunities effectively and efficiently,” the company said in a filing.The segregation of the business verticals will also likely enable them to move forward independently, with specialisation building on their respective capabilities.Following the completion of demerger, the equity shares issued by the resulting company would be listed on the BSE and the NSE. Therefore, the existing shareholders of the demerged company would hold the shares of two listed entities once the scheme becomes effective.Raymond had already approved to demerge its lifestyle business into Raymond Lifestyle while Ray Global Consumer Trading will be amalgamated into Raymond Lifestyle to streamline the group structure. Recently, the National Company Law Tribunal (NCLT) had approved this scheme.
The group’s overall restructuring plans will likely help in paving the way for a more focused and streamlined corporate structure.
On Thursday, Raymond shares closed nearly 1% lower at Rs 2,933 on NSE.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.