Raymond share price trades ex-lifestyle business; hits 5% upper circuit from discovered price

Raymond share price on Thursday's session was locked at a 5% upper circuit, as the shares turned ex-date for the lifestyle firm. Raymond share price today opened at ₹1,950 on the BSE, following a special pre-open price discovery session between 09:45 and 10 AM today. The stock touched an intraday high of ₹2,047.45 apiece on BSE, and an intraday low of ₹1,852.50.

Raymond has set July 11, 2024 as the record date for the demerger of its lifestyle business venture into Raymond Lifestyle (previously Raymond Consumer Care) and establishing the entitlement of the company's shareholders. Four (4) equity shares of Raymond Lifestyle of ₹2 each, fully paid up, shall be issued and assigned to Raymond shareholders holding five (5) equity shares of ₹10 each, fully paid up as of the record date.

“Raymond got ex-dated today for its demerger action in its lifestyle business. The demerged Lifestyle business of Raymond was separated and would be listed separately on stock exchanges by the end of August or early September 2024. As per the spin off (4:5 share swap ratio). We believe this move is aimed to unlock greater value for investors and focused business plans for each segment. As per the demerger assumption post demerger all businesses are expected to be net debt free. As a long term investor such spin off corporate restructuring is a part of unlocking shareholders value and we continue to remain positive on the corporate action,” said Prashanth Tapse, Research Analyst, Senior Vice President of Research at Mehta Equities.

According to a recent report by brokerageMotilal Oswal Financial Services, the record date of demerger was July 11,and the firm anticipates the lifestyle division to be listed within the following two months. EBO and product expansion will be the driving forces behind the lifestyle segment's growth strategy. EBO will expand by opening 250-300 more stores during the next 12-18 months.

To unlock value for its shareholders, the firm took the corporate action of separating the Lifestyle division from Raymond. Following the demerger, there will be two listed companies: Raymond Lifestyle and Raymond. Raymond will oversee both the real estate and engineering businesses.

According to newsreports, Raymond said in its FY24 annual report that the Group has sold its fast moving consumer goods (FMCG) division and has now selected the core three sectors of Lifestyle, Real Estate, and Engineering as future development pillars. With the division of the Lifestyle business into a distinct corporation, Raymond's parent company will now include Real Estate and Engineering industries. This corporate activity, with the intention of increasing shareholder value, leads them to the brink of a new beginning.

Brokerage Motilal Oswal has retain ‘buy’ rating on the stock. The brokerage expects the per share value of Raymond Ltd will be about ₹1,415 (value of ₹94 billion) after the record date (11 Jul’24), which includes ₹1,200 of real estate and ₹215 of the engineering business. The lifestyle business could be listed at about ₹2,930/share.

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