Shareholder value creation at heart of demerger plan: Gautam Singhania

Singhania said the company's investments in capacity expansion a couple of years ago, which are now coming online, are helping it capitalise on opportunities arising from the challenges in Bangladesh

Shareholder value creation is at the core of Raymond's demerger plans, said Gautam Singhania, chairman and managing director of Raymond. Singhania spoke at a press conference on Tuesday ahead of the listing of its lifestyle business, Raymond Lifestyle, on the bourses.

"Next year, the real estate business demerger is happening. We are one of the best-performing stocks this year," said Singhania. So far in 2024, Raymond has risen 98 per cent and is the fourth-best performer in the Nifty Smallcap 100 after Cochin Shipyard, NBCC India, and Housing and Urban Development Corporation (HUDCO). The stock gained 5.1 per cent on Tuesday after the company confirmed the demerger and listing plans for its lifestyle and realty businesses. The company at present commands a market capitalisation of Rs 14,055 crore.

"I genuinely believe that this business's sum of parts valuation will be exponential. You will see a company that makes fabrics, garments, and branded apparel. Various categories all in one," said Singhania.

Raymond Lifestyle plans to add 900 new outlets over three years and is eyeing a 15 per cent compound annual growth rate (CAGR) to attain around 7 per cent market share in the men's wear wedding market by 2027.

Singhania said the company's investments in capacity expansion a couple of years ago, which are now coming online, are helping it capitalise on the opportunities arising from the challenges in Bangladesh. Singhania said Raymond's position as an integrated supplier that supplies garments and fabrics gives it an advantage over its Bangladeshi counterparts, who are primarily garment manufacturers. Singhania refused to give any projection on the uptick in revenue the company was expecting in Bangladesh and said it is a bit early to estimate the revenue gains.

On succession plans, Singhania said Raymond is a "family-managed professional company."

"I am not going anywhere. I realised in 2017-2019, when I left it to advisors, people who did not have skin in the game, and I know what problems we had. Today, I am going nowhere. I am a hands-on CEO of the group but with full professionalisation as required, but the buck stops with me. We have completely transformed Raymond from Covid to today," said Singhania.