Shares of Raymond fell nearly 40% on Thursday as the shares traded without the value of the lifestyle business Raymond Lifestyle, which is being demerged from the business.

What Happened: Raymond had announced July 11 as the record date to decide the shareholders for getting the demerged shares of Raymond Lifestyle business. Investors will receive four shares of Lifestyle Business for every five shares of Raymond they own. The company said the lifestyle business is expected to be listed in the next two months. 

In addition to this, Raymond announced on July 4 that it would also demerge its realty business from the parent company. For every one share held in Raymond, investors will get one share of the demerged Raymond Realty business.

After both the spin-offs, Raymond will be an engineering company with three segments: steel files and tools and hardware, auto and electric vehicle components as well as aerospace and defence, Motilal Oswal said. 

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According to Motilal Oswal, the Raymond Lifestyle stock will be valued at ₹2,930. It sees an 18% compound annual growth rate in revenue from the branded apparel segment over FY24-26 and a 9% growth in lifestyle revenue. 

For the real estate business, the management is targetting a 20% pre-sales growth on a sustainable basis, along with a 20% EBITDA margin and 20% return on capital employed in the medium term. Motilal Oswal gave it a valuation of ₹1,200 per share for the real estate entity.

The Engineering segment will be valued at ₹215 per share, said the brokerage firm. 

Price Action: Raymond shares fell 36.04% to ₹2,001.30 on Thursday morning. 

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