The National Company Law Tribunal (NCLT) has recently approved the demerger scheme of Raymond Ltd, enabling the separation of its real estate business into a new entity, Raymond Realty. Effective from 1st April 2025, the transfer of real estate assets to Raymond Realty will allow for more focused management and attract strategic investors. Shareholders of Raymond Ltd will receive one equity share in Raymond Realty for each share they hold. Post-demerger, Raymond Realty will be listed on the Bombay Stock Exchange and National Stock Exchange. The scheme has received regulatory approvals and is set to enhance growth and operational efficiency for the companies.
The National Company Law Tribunal (NCLT) has recently granted approval for the demerger scheme of Raymond Ltd, facilitating the separation of its real estate division into a distinct entity, Raymond Realty. This move is designed to unlock the growth potential of the group's real estate operations and attract strategic investors. Effective from 1st April 2025, Raymond Ltd will transfer its real estate assets and operations to Raymond Realty Ltd.
As part of the demerger, existing shareholders of Raymond Ltd will receive one equity share in Raymond Realty for every share they hold in Raymond Ltd.
Following the demerger, the equity shares of Raymond Realty will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), granting shareholders investment flexibility in two independent entities.
The tribunal's Mumbai bench issued its order earlier this week, approving the proposal under Sections 230 and 232 of the Companies Act, 2013.
The company highlighted the strategic advantages of the scheme, emphasising that separating Raymond's textile and real estate businesses would allow for more focused management, efficient resource allocation, and independent growth paths.
The scheme has received necessary approvals from regulatory bodies, including observation letters from the BSE and NSE, which did not raise any adverse objections.
The tribunal has instructed the company to convene meetings of over 1.72 lakh equity shareholders and 534 unsecured creditors of Raymond Ltd within the next 60 days via video conferencing and e-voting, ensuring nationwide participation.
Additionally, the tribunal has directed the company to send separate notices to the Ministry of Corporate Affairs, Income Tax Authorities, GST Departments, SEBI, and RERA. These authorities have 30 days from receiving the notices to submit any objections, after which no opposition will be presumed.
The scheme also requires the companies to provide details on contingent liabilities, pending litigations, and other financial disclosures. An affidavit confirming compliance with the tribunal's instructions must be filed within ten working days after issuing notices to the stakeholders and authorities.
Launched in 2019, Raymond's real estate business contributed 17% to revenues in the last fiscal year, up from 13% in fiscal 2023. With a target of INR 4,000-4,500 crore in revenues over the next three to four years, the company aims to achieve 20-25% growth in booking value while maintaining 25% margins.
Earlier this year, the NCLT also approved Raymond Ltd's broader restructuring plan, which included the demerger of its lifestyle business and the amalgamation of Ray Global Consumer Trading into Raymond Lifestyle. This restructuring aims to simplify the company's structure, creating a more streamlined organisation and unlocking the potential value of Raymond's distinct business segments.
Raymond Ltd, which operates in textiles, branded apparel, and real estate development, is set to achieve zero net debt for both its lifestyle and non-lifestyle businesses post-restructuring. This strategic restructuring is expected to streamline operations, enhance management efficiency, and provide a clear strategic direction for each of the company's verticals.
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