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Raymond Realty To Become A Wholly-Owned Subsidiary

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Raymond Ltd further said to achieve the high growth momentum in real estate business, the board has also given an in-principle approval for subsidiarisation of real estate business division through a wholly-owned subsidiary.

Fabrics and garments major Raymond Ltd on Monday said its board has approved a consolidation exercise, including the combination of its tools and hardware, and auto components businesses with its engineering business to improve synergies and explore monetisation options.

Besides, the board has also approved consolidation of its business-to-consumer (B2C) venture by transfer of apparel business into Raymond Ltd, the company said in a statement.

As part of the exercise, the real estate business division will be subsidiarised into a wholly-owned subsidiary, it added.

Commenting on the development, Raymond Ltd Chairman and Managing Director Gautam Hari Singhania said the company’s engineering business comprising tools and hardware, and auto components has demonstrated good performance and it is poised for future growth.

“We are consolidating the business to explore all options available to us for monetisation, which will enable deleveraging leading to value creation,” he added.

In a regulatory filing, the company said its board has approved the consolidation of the tools and hardware, and auto components businesses into JK Files (India) Ltd, a wholly-owned subsidiary.

“With a focus to fast track the recovery post pandemic Raymond will consolidate its B2C business by transfer of apparel business into Raymond Ltd.”

It will be carried out by demerging the B2C business, including apparels, of Raymond Apparel Ltd (RAL), a wholly-owned subsidiary, on a going concern basis to merge with the company itself.

“This move will strengthen efficiencies, streamline and simplify processes and bring in synergy benefits in terms of design and innovation, sourcing and retail network,” Raymond Ltd said.

In order to enable and execute the above decisions, the company said it has “withdrawn the de-merger scheme of lifestyle business announced in November, 2019. These actions will enable each of the businesses for monetization which will fuel growth and deleveraging.”

Singhania said, “We continue to focus on our B2C business by bringing in operational efficiencies and synergies to strengthen our Lifestyle business.”

Raymond Ltd further said to achieve the high growth momentum in real estate business, the board has also given an in-principle approval for subsidiarisation of real estate business division through a wholly-owned subsidiary.

Launched in 2019 with the development of land in Thane, Raymond said its real estate business is now “poised for growth with a focus on delivering a value-based offering”.

“The real estate division is a sustainable profitable business led by experienced professional team with a clear long term strategy in place,” the company said, adding the vertical now plans to capitalise on its strengths by extending beyond Thane.

It will deliver around 3 million sq ft of residential projects and has already achieved sales of over 70 per cent of launched inventory of around 2 million sq ft, it added.

Stating that the realty business has showcased performance since its launch, Singhania said, “In order to realise its full potential it will now be a wholly-owned subsidiary of Raymond Ltd.”

Source: PTI

(The story has been published from a wire feed without modifications to the text. Only the heading has been changed)

 

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