On May 14, 2025, Raymond Limited witnessed a sharp and historic plunge of 64.76% in its share price, one of the steepest intraday declines since the company’s listing. While such a fall might alarm casual observers, seasoned investors will recognize that this is not due to deteriorating business fundamentals or negative news, but rather a technical adjustment linked to the demerger of Raymond’s real estate arm, Raymond Realty Ltd.
Here’s a detailed breakdown of the event, its implications, and what Raymond shareholders should prepare for going forward.
What Happened? Understanding the Raymond Demerger
Raymond Ltd. has formally demerged its thriving real estate business, Raymond Realty Ltd., into a separate listed company to unlock shareholder value and enhance operational focus. As a result of this strategic restructuring:
- Raymond shareholders will receive 1 share of Raymond Realty Ltd for every 1 share of Raymond Ltd held.
- The record date for this demerger was May 14, 2025.
- The new entity, Raymond Realty, is expected to be listed on Indian stock exchanges by the September quarter of FY26.
This demerger is part of a broader corporate restructuring strategy by the Raymond Group. Just last year, Raymond spun off its lifestyle business into Raymond Lifestyle Ltd, which was listed on September 5, 2024.
Why Raymond Demerged Its Realty Business
Raymond’s foray into real estate, under the Raymond Realty brand, has grown rapidly in recent years and contributed significantly to the group’s overall performance.
Objectives Behind the Demerger:
- Allow focused growth and capital allocation in core businesses
- Enable independent strategic direction and leadership for the real estate vertical
- Give investors the freedom to invest in the segment they believe in—real estate or engineering
Key Details for Raymond Shareholders
| Parameter | Details |
|---|---|
| Record Date | May 14, 2025 |
| Allotment Ratio | 1 share of Raymond Realty Ltd for every 1 share of Raymond Ltd |
| Listing Timeline | Raymond Realty will be listed by Q2 FY26 (July–September 2025) |
| Parent Company | Raymond Ltd remains listed, now focusing on engineering and components |
Raymond Realty: Growth Story and Future Prospects
Raymond Realty is well-positioned in India’s booming urban residential real estate market, especially in the Mumbai Metropolitan Region (MMR).
Real Estate Portfolio Overview:
- 100-acre land parcel in Thane, with:
- 40 acres under active development
- 60 acres reserved for future expansion
- 6 Joint Development Agreements (JDAs) across premium Mumbai locales: Bandra, Sion, Mahim, and Wadala
Revenue Potential:
| Source | Estimated Revenue |
|---|---|
| Thane Land Development | ₹25,000 crore |
| Mumbai JDAs | ₹14,000 crore |
| Total Revenue Potential | ₹39,000–₹40,000 crore |
Financial Snapshot (FY24):
- Real Estate Revenue Contribution: ~20% of Raymond Group’s total revenue
- EBITDA Contribution: ₹380 crore
- Growth Outlook: Targeting a 20% CAGR in revenue, bookings, and profits
Investor Takeaway: Is the Stock Crash a Cause for Concern?
The sharp fall in Raymond Ltd’s share price may appear concerning, but in the context of a demerger, it is purely mathematical. As the company’s assets are split between two entities, the valuation adjusts accordingly.
What matters now is:
- Holding onto your Raymond shares if you’re interested in the engineering business
- Watching for Raymond Realty’s listing to assess the new stock’s valuation and growth strategy
- Rebalancing your portfolio based on your sector preference—engineering or real estate
Final Thoughts
The Raymond Realty demerger is a strategic move to unlock value and improve focus across businesses. It creates two distinct investment opportunities:
- Raymond Ltd as an engineering-focused business with exposure to EV, aerospace, and industrial precision markets
- Raymond Realty Ltd as a pure-play real estate company with strong urban land bank and ambitious growth targets
As Raymond Realty approaches its listing in Q2 FY26, investors should keep an eye on management commentary, listing price expectations, and broader market sentiment in the Indian real estate sector.
