Raymond Shares Plunge 64%: What's Behind the Post-Demerger Decline?

In a surprising twist on Wednesday, Raymond Ltd’s shares took a nosedive, falling a jaw-dropping 64%. They closed at ₹530, way down from the previous day’s ₹1,561.30. Alarming? Maybe at first glance. But according to market analysts, this isn’t a panic-induced selloff; it’s a notional price reset tied to a significant corporate move.

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What’s Behind the Drop?

This sharp fall comes right after Raymond officially spun its real estate business into a separate company, Raymond Realty Ltd. If you’re a shareholder, don’t worry: for every share of Raymond Ltd. you hold, you’ll now also own a share of Raymond Realty. So, in theory, your total investment value remains the same; it’s just split between two companies now.

The big idea? By separating the real estate business, Raymond aims to sharpen its focus and boost value in three key areas: lifestyle, real estate, and engineering.

As Chairman and MD Gautam Hari Singhania said, “We now have three clear growth vectors: lifestyle, real estate, and engineering. This demerger is all about building shareholder value.”

How’s Raymond Realty Doing?

Quite well, actually. In FY24, Raymond Realty brought in ₹1,593 crore in revenue and notched an EBITDA of ₹370 crore, a 43% jump from the previous year. The company owns 100 acres of land in Thane and has projects worth ₹9,000 crore. There’s even more revenue potential, over ₹16,000 crore. Plus, they’ve kicked off joint development deals in Mumbai’s Mahim, Sion, and Bandra East, expected to generate another ₹7,000 crore.

Should Investors Be Worried?

Not really. Experts say a price drop is standard when a company splits up. The value once packed into Raymond Ltd’s stock is now between two separate businesses. That means investors can now benefit from the growth of both, independently.

Raymond Realty is expected to hit the stock market by Q2 of FY26, giving investors a clearer picture of what they’re investing in. Until then, investors should consider each company's financials and future plans to make smart choices.

Why Raymond Is Doing This

It’s all about focus. By creating separate businesses, each can zero in on its market and customers. Whether it's high-end fashion, cutting-edge engineering, or real estate development, each company can chart its path.

The engineering division, known for its precision products, aims to double its revenue in the next five years. Meanwhile, the lifestyle arm, home to Raymond’s iconic apparel and textile brands, remains a core part of the business.

Wrapping It Up

Yes, the 64% drop in Raymond stock price looks dramatic. But it’s not a crisis; it’s just the math of a significant structural shift. With the real estate business now standing independently, both companies are positioned for more focused growth. For investors, that could mean more opportunities if they play it smart.