Raymond shares jump 5%. Why stock hit upper circuit today?
Raymond Ltd shares surged 5% on Thursday, hitting the upper circuit limit and recovering some ground after a sharp plunge in the previous session. The rebound comes as investors recalibrate following the recent demerger of the company's real estate arm, Raymond Realty.At the Bombay Stock Exchange, Raymond shares were locked at Rs 578.70 in early trade, up 4.99%. The buying comes a day after the stock appeared to lose more than 60% of its value, a fall that was not driven by weak fundamentals or selling pressure but by a mechanical price adjustment.DID RAYMOND SHARES REALLY CRASH?Wednesday's steep decline caught many investors off guard, especially those using trading platforms that did not immediately reflect the post-demerger price adjustment. The drop, however, was purely technical. Shareholders of Raymond Ltd will receive one share of Raymond Realty for every share held, as per the scheme approved earlier this month.Raymond Realty, which has carved out a strong position in Mumbai's residential real estate market, will be listed separately by the September quarter. Until then, the parent company's stock will no longer include the realty business in its valuation, hence the markdown.Market experts had urged investors not to panic, pointing out that the drop in Raymond Ltd's share price was a repricing event. 'This is a notional correction, not a fundamental one. Investors now hold shares in two separate entities with distinct growth trajectories,' said one analyst.The enthusiasm around Raymond Realty's impending listing is not without reason. In Q4 FY25, the real estate arm reported Rs 766 crore in revenue, up 13% year-on-year. EBITDA stood at Rs 194 crore with a margin of 25.3%, and the business sits on a healthy net cash surplus of 399 crore.Bookings in the March quarter touched Rs 636 crore, led by marquee projects like The Address by GS 2.0, Invictus, and Park Avenue – High Street Retail in Thane, along with a Bandra-based joint development agreement (JDA) project.The company is actively expanding beyond its Thane base, having recently signed JDAs in Mahim and Wadala with a combined potential value of 6,800 crore. These projects take the estimated gross development value of Raymond Realty's portfolio to nearly 40,000 crore.'This strategic move reinforces our commitment to unlock shareholder value and focus on pure-play businesses,' said Chairman and MD Gautam Hari Singhania.The realty demerger follows Raymond's earlier spinoff of its lifestyle division, which listed on the bourses in September 2024. Both steps are part of a larger transformation to create sharper business verticals and offer investors greater transparency and focused opportunities.While the initial volatility may have triggered knee-jerk reactions, Thursday's sharp rebound reflects renewed investor confidence as the dust around the demerger settles. With a strong order book, a robust balance sheet, and a clear listing timeline, Raymond Realty's next chapter may yet be one of the group's most value-accretive.
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