Raymond Group Shares Shockingly Plummet 40%: An In-Depth Analysis of Today’s Crash

Why Raymond Group Shares Crashed 40% Today: A Closer Look

Background Raymond Group Companies :

• On the trading day when Raymond Group shares nosedived by 40%, the company was undergoing a significant corporate action: the demerger of its lifestyle business.
• The demerger aimed to separate the lifestyle business from the rest of Raymond Ltd.
• Existing investors of Raymond Group would receive four shares of Raymond Lifestyle (RLL) for every five Raymond shares they held.
• The demerged lifestyle business would be listed separately on stock exchanges around August-September.

Immediate Impact:

• Raymond Group shares opened at Rs 1,906 on the National Stock Exchange (NSE), down 39.60% from the previous day’s closing value of Rs 3,156.10.
• The stock price reflected the value of Raymond Ltd. excluding the lifestyle business.
• Market participants reacted swiftly to the demerger news, resulting in a sharp decline.

Valuation Considerations:

• Analysts estimated the per-share value of Raymond Ltd. post the corporate action.
  • MOFSL (Motilal Oswal Financial Services Limited) estimated a value of Rs 1,415 per share.
  • This valuation included Rs 1,200 per share for real estate assets and Rs 215 for the engineering business.
  • The lifestyle business was expected to be listed at Rs 2,930 per share, according to domestic brokerage InCred Equities.
• InCred Equities further estimated:
  • Lifestyle business fair value: Rs 1,982 per share
  • Realty business fair value: Rs 1,086 per share
  • Engineering business fair value: Rs 499 per share

Long-Term Strategy:

• The demerger of the lifestyle business is part of a broader plan.
• Raymond Group also intends to demerge its real estate business, a process that may take 15-18 months to complete.
• After the real estate demerger, the remaining Raymond entity will focus solely on the engineering business.

Real Estate Potential:

• Raymond Group owns 100 acres of legacy land in Thane, out of which 40 acres are under development.
• The revenue potential from the 40 acres under development is Rs 9,000 crore.
• The remaining area has a revenue potential of Rs 16,000 crore, expected to accrue over approximately 8 years.
• The joint development agreements (JDAs) contribute an additional revenue potential of Rs 7,000 crore, expected within 4-5 years.
• The real estate business has Rs 500 crore in cash reserves and no significant capital requirements for the next 2 years.

Engineering Business Outlook:

• The acquisition of MPPL (Machining Power Private Limited) has unlocked substantial value in aerospace and defence.
• Arihant Capital Markets predicts the engineering business will reach an annual run rate of Rs 4,000 crore within 3 years.
• It is expected to maintain a stable EBITDA margin of 25%.
• Raymond plans to expand further through joint development agreements rather than acquiring new land.

Investor Takeaways:

• Investors should closely monitor Raymond Group’s real estate demerger and the subsequent listing of the lifestyle business.
• Assess the fair value estimates provided by different brokerages.
• Consider the long-term prospects of the engineering business.
• Raymond’s strategic moves aim to unlock value, but prudent investment decisions require careful evaluation.

In summary, while the recent share price crash was a reaction to the demerger, investors should focus on the company’s long-term vision and the potential of its business segments. 🚀💼

More Articles

Sun Pharmaceutical Industries Ltd: A Comprehensive and Promising Investor Analysis with Exciting Opportunities

Flipkart-Backed Truck Aggregator BlackBuck Excitingly Files for IPO, Targeting ₹550 Crore

Tata Power Company Limited: A High-Voltage Rising Star in the Stock Market

Yes Bank Limited Stock: A Comprehensive Analysis of Exciting Prospects and Ambitious Price Targets

Ola Cabs Innovates with Bold Move to Ola Maps, Replacing Google Maps: Founder Bhavish Aggarwal Announces

Sena Leader’s Drunk Son Allegedly Driving BMW in Fatal Mumbai Accident: Sources

Rahul Gandhi: The Controversial Political Leader

Linguistic Diversity Shines: MPs Take Oath in Sanskrit, Hindi, and Other Languages

Om Birla Re-Elected as Lok Sabha Speaker: A Milestone of Bipartisan Unity

Asaduddin Owaisi’s Controversial Oath Sparks Debate on His Integrity in Parliament

Bhartruhari Mahtab Appointed as Pro-Tem Speaker for the 18th Lok Sabha: A Key Leadership Role

PM Modi’s Powerful Message to INDIA Bloc: Prioritize Substance and Debate Over Slogans and Disruption Ahead of 18th Lok Sabha Session

Hajj Deaths Toll Mounts as Hajj Pilgrims Suffer Amidst Extreme Heat and Poor Conditions

PM Modi Celebrates International Yoga Day in Srinagar

Reliance Power Emerges Debt-Free: Anil Ambani’s Remarkable Turnaround – News 24 Media 

SEBI’s Investor Certification Program: Empowering Financial Literacy and Informed Decision-Making in the Indian Securities Market – A Major Step Towards Financial Inclusivity

Raymond Group Stocks Jump Over 8.5% to Set New High:

Ixigo IPO: Flying High or Turbulence Ahead? A Deep Dive into India’s Profitable Travel Tech Unicorn

Sensex and Nifty Surge: Full Recovery from Recent Plunge Boosts Investor Confidence Amid Anticipation of New Government

Adani Group Stocks Surge on Anticipated NDA Victory: What Investors Need to Know