Raymond shares crash 64%: Why is the stock falling after realty demerger?
Shares of Raymond Ltd plunged over 64% on Wednesday, not due to any negative news or fundamentals, but as a technical adjustment linked to the demerger of its real estate business, Raymond Realty.At last count, the stock was trading at Rs 556.45, down 64.36% from its previous close of Rs 1,561.30. The sharp fall coincided with the ex-date of the demerger, when Raymond shares stopped factoring in the value of its real estate business.advertisementWHAT'S HAPPENING?Today is the record date to determine eligible shareholders who will receive shares of Raymond Realty, following the May 1 demerger. Under the approved scheme, investors will get one share of Raymond Realty for every share held in Raymond Ltd.
This is the second major demerger for the group, following the earlier split of its lifestyle business into Raymond Lifestyle, which listed on stock exchanges in September 2024.The real estate arm — now demerged — is expected to list separately by the September quarter. Until then, Raymond's stock will reflect only the non-realty segments of the business.Raymond Realty ended FY25 on a strong note, clocking Rs 766 crore in revenue for the fourth quarter, up 13% year-on-year. Its booking value stood at Rs 636 crore, led by projects like The Address by GS 2.0, Invictus, and Park Avenue – High Street Retail in Thane, along with the JDA project The Address by GS in Bandra.advertisementThe business also reported a healthy EBITDA of Rs 194 crore with margins at 25.3%, and sits on a net cash surplus of Rs 399 crore.Raymond Realty is expanding beyond Thane, having signed two new Joint Development Agreements in Mahim and Wadala, together valued at Rs 6,800 crore. These take its non-Thane project count to six, strengthening its presence across the Mumbai Metropolitan Region (MMR).'This strategic move reinforces our commitment to unlock shareholder value and focus on pure-play businesses,' said Gautam Hari Singhania, Chairman and MD of Raymond. 'We are strengthening our footprint across MMR and delivering on our promise of timely, high-quality developments.'While the sharp price drop may have caught some investors off-guard — especially those using mobile trading apps that may not yet reflect the adjusted valuation — the correction is largely mechanical and not a reflection of weak fundamentals.As the company gears up for the separate listing of Raymond Realty, the demerger is seen as a move to enhance transparency, operational efficiency, and growth potential in one of India's most competitive real estate markets.
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