Raymond Ltd’s recent stock performance has been a tale of sharp swings driven not by fundamentals, but by structural changes in the company’s business composition following the demerger of Raymond Realty.
On Thursday, shares of Raymond Ltd surged by 5%, locking in at ₹578.70 and hitting the upper circuit limit on the Bombay Stock Exchange. This bounce comes right after what appeared to be a dramatic 60% plunge on Wednesday—a decline that was not caused by poor performance or mass selling but by a mechanical price adjustment tied to the separation of its real estate business.
What Actually Happened?
The apparent crash caused confusion among retail investors, especially those using trading platforms that didn’t immediately account for the post-demerger price recalibration. The reality is that Raymond Realty has been spun off as a separate entity, and shareholders will receive 1 share of Raymond Realty for every 1 share held in Raymond Ltd. Since Raymond Realty’s value is no longer reflected in Raymond Ltd’s stock, the parent company’s share price had to adjust accordingly.
This was a technical repricing, not a reflection of weakened fundamentals. As one analyst noted:
“Investors now effectively hold two entities, both with their own distinct value and growth profiles. The fall was notional.”
Why the Optimism Around Raymond Realty?
The soon-to-be-listed Raymond Realty is emerging as a significant player in Mumbai’s residential property market:
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Q4 FY25 Revenue: ₹766 crore (13% YoY growth)
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EBITDA: ₹194 crore (25.3% margin)
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Net cash surplus: ₹399 crore
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Bookings in Q4: ₹636 crore
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Key projects: The Address by GS 2.0, Invictus, Park Avenue – High Street Retail (Thane), and a Bandra JDA project
The firm is also expanding beyond Thane with new joint development agreements in Mahim and Wadala, pushing the gross development value (GDV) of its real estate portfolio to approximately ₹40,000 crore.
Strategic Rationale
Chairman and MD Gautam Hari Singhania framed the move as part of a broader restructuring strategy aimed at creating “pure-play businesses” and unlocking shareholder value. The real estate demerger follows the earlier spinoff of Raymond Lifestyle in September 2024, signaling a deliberate shift toward streamlined verticals.
Investor Sentiment
While the initial confusion led to panic selling and misinterpretation of the stock movement, the rebound on Thursday suggests that investors are regaining confidence as the dust settles. The strong financials of the real estate arm, its clear listing trajectory, and a focused business model are generating renewed optimism for Raymond's long-term value creation.
In essence, shareholders who stayed the course through the turbulence now hold stakes in two focused, well-positioned companies, both poised for growth in their respective domains.
