Raymond consolidates tools & hardware, auto parts biz into engineering biz

Board clears move to convert realty division into fully-owned subsidiary

Apparel and textile company Raymond on Monday said its board has approved plans to consolidate the tools and hardware and auto components businesses into engineering business for improving synergies and exploring monetisation options for deleveraging the company.

"The overall objective being value creation for shareholders. The engineering business has achieved scale and improved market share in both domestic and global markets. These businesses have demonstrated growth in EBITDA margins, generated free cash flows and are debt-free," it said.

Raymond said to achieve high growth momentum in real estate business, the board has also in principle approved the conversion of the real estate division into a wholly-owned subsidiary.

The company added that its real estate business, which was launched in 2019 and started development of land in Thane, is now poised for growth with a focus on delivering value-based offerings. The division will deliver around 3 million sq ft of residential projects and we have already achieved sales of over 70 per cent of launched inventory of about 2 million sq ft. "The real estate division is a sustainable profitable business led by experienced professional team with a clear long term strategy in place. Real estate business now plans to capitalise on its strengths by extending beyond Thane," it said.

With a focus on speeding up recovery post-pandemic, Raymond will consolidate its B2C business by transferring the apparel business to the flagship company Raymond. "This move will strengthen efficiencies, streamline and simplify processes and bring in synergy benefits in terms of design and innovation, sourcing and retail network, " it said.

"In order to enable and execute the above decisions, the company has withdrawn the de-merger scheme of Lifestyle business announced in November, 2019. These actions will enable each of the businesses for monetization which will fuel growth and deleveraging", it said.