📉 Raymond Shares Plunge 66%: Decoding the Realty Demerger and Market Reaction
“Raymond’s 66% Stock Slide: A Strategic Restructuring or Investor Panic?”
🧩 What Triggered the Sharp Decline?
On May 14, 2025, Raymond Ltd’s shares plummeted by 66%, dropping from ₹1,561.30 to ₹530. This significant fall wasn’t due to a sell-off but was a notional price adjustment as the stock turned ex-date for the demerger of its real estate division, Raymond Realty.
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🏗️ Understanding the Demerger
The demerger involved separating Raymond’s real estate business into a wholly-owned subsidiary, Raymond Realty Ltd. Shareholders received one share of Raymond Realty for every share held in Raymond Ltd. This move aimed to unlock the growth potential of the real estate business by allowing it to operate as an independent entity.
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📊 Financial Health of Raymond Realty
Despite the stock’s decline, Raymond Realty exhibits strong financials:The Economic Times
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Revenue: ₹1,593 crore in FY24, marking a 43% YoY growth.
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EBITDA: ₹370 crore in FY24.
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Land Bank: Approximately 100 acres in Thane, with 40 acres under development.
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Revenue Potential: Estimated at ₹25,000 crore over the next eight years.
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Cash Reserves: ₹500 crore, with minimal capital requirements for the next two years.
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🔄 Market Reaction: Not a Panic Sell-Off
The 66% drop reflects the stock trading ex-demerger, adjusting for the separation of the realty business. It’s a technical adjustment rather than a reflection of the company’s underlying value. Investors now hold shares in both Raymond Ltd and Raymond Realty, each representing distinct business verticals.
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🔮 Future Outlook
Post-demerger, Raymond Ltd will focus on its engineering business, while Raymond Realty will concentrate on real estate development. Analysts anticipate that this strategic restructuring will unlock value for shareholders by allowing each entity to pursue tailored growth strategies. Raymond Realty’s strong financial position and substantial land assets position it well for future growth.
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📝 Conclusion
The sharp decline in Raymond’s share price is a technical adjustment due to the demerger of its real estate business. Both Raymond Ltd and Raymond Realty are now poised to operate as focused entities, potentially offering enhanced value to shareholders in the long term.
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