The price of the Raymond Limited stock crashed as much as 64.76% today (May 14, 2025), marking one of the largest price drops since its listing on the Indian stock market. The fall in share price is not influenced by any fundamental problems or news, it's due to the technical adjustments related to the company’s demerger of its real estate business, Raymond Realty Limited.
Here is a breakdown of what happened, why it matters, and what investors should keep in mind.
Key highlights:
- Raymond Ltd's stock price dropped 64.76% on May 14, 2025, due to technical adjustments from the demerger of Raymond Realty Ltd.
- The demerger aims to unlock greater value for shareholders, with Raymond Realty becoming a separate listed entity.
- Shareholders of Raymond Ltd. will receive 1 share of Raymond Realty for every 1 share held, with the record date set for May 14, 2025.
- Raymond Realty's stock is expected to be listed by the September quarter of FY26.
- Raymond Realty’s portfolio includes 100 acres in Thane, with 40 acres under active development and 60 acres reserved for future projects.
- The Thane land is expected to generate ₹25,000 crore in revenue, with six Joint Development Agreements (JDAs) across Mumbai expected to add ₹14,000 crore, bringing total revenue potential to ₹40,000 crore.
- Raymond Realty aims for a 20% CAGR in revenue, bookings, and profit in the coming years.
Why is Raymond demerging its realty business?
Raymond Ltd., known for its Real Estate and Engineering businesses. The real estate vertical of the company, Raymond Realty Ltd, has gained significant momentum in recent years.
The company has initiated a demerger of Raymond Realty to unlock greater value for shareholders and allow both businesses to operate independently. The move will help Raymond Ltd to focus on its engineering operations, organized into two key verticals: precision engineering and high-performance components used in aviation, defence, and aerospace applications, and manufacturing components for the automotive industry, including electric vehicles.
Following the demerger, Raymond Realty will become a separate listed entity, giving investors direct exposure to the company’s growing real estate portfolio.
Impact of demerger on Raymond’s share price
Raymond Ltd.'s stock price dropped 64.76% today, due to the technical adjustments related to the demerger of its realty business.
The drop was basically led by the transfer of Raymond Ltd’s value to the newly created entity, Raymond Realty. The current share price will now just reflect the value of its remaining businesses, Raymond Ltd.
In short, these price changes are normal in demergers. Which means that the total value is not lost; it is just split between two companies, Raymond Ltd and Raymond Realty Ltd.
What do shareholders need to know?
If you're a Raymond shareholder, here's the key detail:
- Allotment Ratio: For every 1 share of Raymond Ltd., you will receive 1 share of Raymond Realty.
- Record Date: May 14, 2025, was set as the record date to determine eligible shareholders
- Listing Timeline: As per the disclosure by the company, the demerged realty business will be listed on the stock exchange by the September quarter of FY26, which will allow investors to allocate their capital to their preferred business segment.
This marks Raymond Group's second significant demerger in the past 12 months after its lifestyle business spun off into Raymond Lifestyle Ltd, which listed on Indian stock exchanges on September 5, 2024. As of now, Raymond Lifestyle's stock price is down over 50% since January, with a market cap of ₹5,970 crore.
Growth Trajectory of Raymond Realty
- Revenue Contribution: The realty business of the company accounted for approximately 20% of Raymond Group's revenue in FY24
- EBITDA Contribution: The segment added around ₹380 crore to the group's EBITDA in FY24
- Growth Projections: The realty vertical aims for a 20% CAGR in revenue, bookings, and profit in the coming years.
Raymond Realty's Land Portfolio and Future Revenue Potential
Raymond Realty’s portfolio post-demerger highlights the strong potential as the company holds a 100-acre land parcel in Thane, with approximately 40 acres under active development and another 60 acres reserved for future projects.
Additionally, Raymond Realty has signed six Joint Development Agreements (JDAs) across Mumbai, including Bandra, Sion, Mahim, and Wadala. The Thane land alone is expected to generate around ₹25,000 crore in revenue, while the JDAs are projected to add another ₹14,000 crore, which adds up to a total estimated potential of nearly ₹40,000 crore in revenue.
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