Raymond to consider issue of non-convertible debentures up to Rs 2,200 cr

Raymond, on Thursday, said its board of directors will consider the issue of non-convertible debentures up to Rs 2,200 crore at a meeting scheduled to be held on Tuesday, May 9 2023.

In a filing with the stock exchanges, the company said, “The Board of Directors of Raymond Limited (“the Company”), at its meeting scheduled to be held on Tuesday, May 9, 2023, will also consider inter alia, issue of Non-Convertible Debentures up to an amount not exceeding Rs 2,200 crore (Rupees Two Thousand Two Hundred Crore) in two or more tranches on a private placement basis for repayment of external debt, to such associate company of the Company, as the Board may determine, subject to receipt of necessary approvals required under applicable law.

The outcome of the board meeting will be communicated to the stock exchanges after conclusion of the board meeting on May 9 2023.

On 27 April, the Gautam Singhania-led Raymond Group announced its exit from the consumer care business by selling condom brands KamaSutra and Premium and deodorant brands Park Avenue and DS to the Godrej Group for Rs 2,825 crore in an all-cash deal.

However, the Raymond group will continue to manufacture these brands, sell them to B2B consumers and export. This means that Raymond will contract-manufacture and sell these brands to Godrej Consumer Care. It also means the exit is only from the consumer facing side of this business in the domestic market.

Its condom plant is in Aurangabad, Maharashtra, while it sources the deos from contract manufacturers.

The Raymond Group also announced the demerger of its consumer facing/lifestyle businesses into Raymond Consumer Care (RCCL), which will, upon merger, get listed. Raymond shareholders will get four shares of the RCCL for every five shares they hold.

The group expects the demerger process to be completed over the next 15 months.

Group chairman and managing director Singhania, who owns 49 per cent in RCCL, said, he will not take a single penny from the sale but the entire proceeds will go into the company (RCCL). A portion of the money will be used to completely repay the net debt of the group, which as of December 2022 stood at Rs 920 crore, and gross debt of Rs 2,000 crore.

"In 2019, I infused Rs 350 crore into the company (real estate arm) when we sold a portion of our land. In the similar manner more than Rs 1,000 crore from this sale will go into RCCL, which has been a debt free entity all through, only, and the rest of the proceeds will be sued to make the group debt-free and the balance will be used for other business purposes, taking the promoter's equity infusion to Rs 1,400 crore," Singhania said.

Post demerger, the group will have two independent net debt-free listed entities for lifestyle, which will be under RCCL, and real estate businesses which will be under Raymond, already a listed entity, he said.

(With agency's input)