Shares of Raymond were gaining on Friday after the firm said it would demerge its real estate business, Raymond Realty.

What Happened: The move aims to unlock value in its real estate business and attract new investors and strategic partners by consolidating the entire real estate business under one entity.

The company plans to issue 6.65 crore shares of Raymond Realty with a face value of ₹10 per share. Upon completion, shareholders will receive one Raymond Realty share for each Raymond Ltd share they hold. There will be no cash or other form of consideration involved.

Raymond Realty will be listed on both the National Stock Exchange and Bombay Stock Exchange.

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Unlocked Value: Raymond Realty owns 100 acres of land in Thane, with 11.4 million square feet of Real Estate (Regulation and Development) Act-approved carpet area. About 40 acres are currently under development with five ongoing projects worth ₹9,000 crore and an additional potential to generate over ₹16,000 crore, totalling a potential revenue of over ₹25,000 crore from this land bank.

Recently, Raymond Realty launched its first joint development agreement (JDA) project in Bandra, Mumbai and signed three more in Mahim, Sion and another in Bandra East, Mumbai. These four JDA projects have a combined revenue potential of over ₹7,000 crore. Combining the Thane land bank and current JDAs, the company sees a potential revenue of ₹32,000 crore.

The demerger will enable independent capital allocation and balance sheet management tailored to the specific needs of each business.

Last year, Raymond announced the demerger of its lifestyle business to Raymond Consumer Care to create a listed entity focused on a pure-play B2C lifestyle business, in a bid to become net-debt free.

Price Action: Raymond’s share price was up 5.31% at ₹3,096.15 near the start of trade on Friday.

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