Raymond plans to demerge Lifestyle Business, stock jumps 9 per cent

Raymond, India’s leading worsted suiting fabric manufacturer, notified that it has planned to demerge its core lifestyle business, in a stock filing after market hours on Thursday.

The company made an announcement about its plans to demerge its core Lifestyle Business into a separate entity that will be listed through mirror shareholding structure. The newly listed company will hold a share in the existing business of branded textile, branded apparel, and garmenting while the existing company will retain real estate projects, Thane land bank, B2B Shirting, and denim and FMCG businesses. It will also keep engineering ventures, which deal in auto components and tools and hardware, with itself. 

Every Raymond shareholder will get shares of the new company in the ratio of 1:1. The move aims at creating a clear demarcation between Lifestyle and other businesses of the company, leading to a simplification of the Group structure.

Raymond also informed about its fund raising plans, which is through allotment of preference shares to JKIT, its associate company. It will raise a total of Rs. 350 crores to be used for reducing debt.

Reacting to the news, the company's stock jumped as much as 11 per cent intra-day to touch its intra-day high of Rs. 752 on BSE.  At 10.30 stock traded up by 9.5 per cent at Rs. 737.75 on BSE.