Raymond Board of Directors Approves Corporate Consolidation to Explore Business Monetization and Deleveraging

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The engineering textile conglomerate on Monday announced an organizational restructuring plan with the aim of monetizing its assets and deleveraging its business.

The plan will see its fast fashion business consolidate with the parent company and the auto component and tool and computer hardware businesses merge into its engineering division. Meanwhile, its fledgling real estate division will be subdivided into a full-fledged company.

The company said the reorganization will improve synergies while providing the opportunity to monetize businesses and reduce debt. Raymond Limited had a gross debt of Rs 2,470 crore as of March 31, according to

research.

Raymond Limited stock gained 1.73% to close at Rs 447.8 per share on BSE on Monday against a flattened Sensex.

Under this program, the automotive tools and equipment and components business will be merged into JK Files Limited, a wholly-owned subsidiary of the company.

“We are consolidating the business to explore all of our options for monetization, which will enable deleveraging leading to value creation,” said Gautam Singhania, chairman of Raymond Limited, in a statement.

The company announced in November 2019 the split of its clothing business from wholly owned company Raymond Apparel Limited. The demerger plan has been withdrawn and the lifestyle activity will now be transferred to the parent company Raymond Limited in order to streamline the group’s B2C activities. It owns brands like Park Avenue, Color Plus and Parx.

“This move will boost efficiency, streamline and simplify processes and bring synergistic benefits in terms of design and innovation, procurement and retail network,” the company said in a statement Monday.

Raymond had ventured into the real estate development business through Raymond Realty to monetize his contiguous nearly 125 acre parcel of land at Thane’s Cadbury Junction.

For its first real estate development project, the branded clothing major has carved out a 20-acre plot of land from the total landholding and will develop a residential project of nearly 2.7 million square feet over 10 towers. . The project has already received reservations for more than 1,500 apartments.

In October 2010, Raymond had reached an amicable settlement with his union representing nearly 2,000 employees of the Thane unit. The union received full compensation worth Rs 313 crore instead of giving its consent for real estate development on the land that had previously housed Raymond’s textile unit. The settlement provided government agency approvals to Raymond for a real estate project on the land that had housed its flagship textile factory since 1925.

Raymond Limited had reported a consolidated loss of Rs 157 crore for the quarter ending June 30 on income of Rs 826 crore. Its textiles, shirts, clothing and garments had recorded a loss while tools and hardware, auto components and real estate businesses were in the dark.


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