Raymond demerges its core Lifestyle business to be listed as a separate entity

In continuation of its transformational journey of value creation, Raymond Limited today announced the demerger of its core Lifestyle Business into a separate entity that will be listed through mirror shareholding structure. Every shareholder of Raymond Ltd. will be issued the shares of the new company in the ratio of 1:1. The move will create a clear demarcation of Lifestyle & other businesses leading to the simplification of the Group structure.

In another development, Raymond Limited announced the allotment of Equity Shares and Compulsorily Convertible Preference Shares (CCPS) to JKIT, an Associate Company against the infusion of net proceeds of JKIT land sale that was announced in October 2019. A total of Rs. 350 Crores will be used to repay the debt thus deleveraging the Balance Sheet of Raymond Ltd.

Commenting on the development, Gautam Hari Singhania, Chairman & Managing Director, Raymond Limited said, “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.”

Speaking about the financial metrics that this development would lead to, Sanjay Bahl, Group Chief Financial Officer, Raymond Limited said, “In line with our stated strategy of asset monetization, 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 specialization for sustained growth and the ability to attract investors for better access to capital.”

Elaborating the benefits of this development for the business, Sanjay Behl, CEO Lifestyle Business, Raymond Limited said, “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’.”