Raymond shares in early trade on Friday spurted by as much as 11% on the news that it plans to list its lifestyle business on the bourses. On Thursday, the company announced a restructuring plan for its lifestyle enterprise into a distinct unit. In the deal, each of the shareholder of Raymond will be issued share in the ratio of 1:1.
The new business will include branded apparel, textile as well as garments and will works towards unlocking the potential of the company's major lifestyle enterprise.
In an exchange filing Gautam Hari Singhania, Chairman & Managing Director, Raymond is cited as saying in a business report, For over three years now, we have been relentless in building the organization that is future ready and our efforts have been unwavering during this transformational journey despite multiple challenges. As we continue to build capacities for enhanced performance and delivery across verticals, demerging the core Lifestyle Business is an affirmative step towards that direction and this will also simplify the Group structure. We remain resolute to take right steps to enhance value creation for our shareholders."
In another transaction company will issue shares together with Compulsorily Convertible Preference Shares (CCPS) to JKIT in compensation for the proceeds infused into Raymonds from the JKIT land sale, which is the company's associate venture. The Rs. 350 crore will be put towards repaying debt and will help deleverage the balance sheet of the company.
In line with our stated strategy of asset monetisation, the infusion of net proceeds of JKIT land sale in Raymond Limited will help us in debt reduction leading to better operational efficiencies. As our balance sheet will get leaner, it will lead to a better profitability at the group level. The demerger of the Lifestyle Business will enable the Demerged Company and the Resulting Companies to have focused strategy and specialisation for sustained growth and the ability to attract investors for better access to capital", said the CFO of the company, Sanjal Bahl.
"As this iconic brand is nearing its 100th year of existence, the Lifestyle Business is at the cusp of scaling-up exponentially to leverage its true potential. With a large network of over 1500 stores across more than 600 towns and cities, Raymond Lifestyle Business offers an integrated play in the textile, apparel and garmenting segments both in domestic and global markets. With this demerger Lifestyle Business will be well positioned to capitalize on the emerging opportunities through newer capabilities across the entire value chain of 'Fibre to Fashion", he further added.
Raymond shares were last quoting higher by 9.54% at Rs. 738, while it made an intra-day high of Rs. 752.35 on the BSE.