Raymond surges 19% on plans to list demerged Lifestyle biz, pare debt

The company announced business re-structuring plan with demerger of its core Lifestyle business into a separate entity.

Shares of Raymond soared 18.9 per cent to Rs 801.10 on the BSE in intra-day trade on Friday after the company announced its plan to demerge its core Lifestyle business and list it as a separate entity. Furthermore, the company announced to use the entire net proceeds from sale of land parcel by JKIT (its Associate Company) for deleveraging of its Balance Sheet.

"In continuation of its transformational journey of value creation, Raymond Limited on Thursday announced the demerger of its core Lifestyle Business into a separate entity that will be listed through mirror shareholding structure. Every shareholder of Raymond Ltd. will be issued the shares of the new company in the ratio of 1:1," the company said in a regulatory filing. READ FILING HERE

The stock was quoting at its highest level since June 19, 2019. It touched a 52-week high of Rs 885 on December 21, 2018. The trading volumes on the counter jumped seven-fold with a combined 3.9 million shares changing hands on the NSE and BSE till 11:04 am.

Raymond said the demerger is to unlock the potential of the core Lifestyle Business through a new listed company with existing business of branded textile, branded apparel and garmenting. The existing company will, however, retain the real estate project, Thane land bank, B2B Shirting business, engineering businesses of auto components and tools and hardware, denim and FMCG business.

The company also announced the allotment of equity shares and Compulsorily Convertible Preference Shares (CCPS) to JKIT, an associate company against the infusion of net proceeds of JKIT land sale that was announced in October 2019. A total of Rs 350 crore will be used to repay the debt thus deleveraging the balance sheet of Raymond, it added.