The Indian stock market witnessed a sharp move in Raymond share price on 14 May 2025 , as the stock plunged nearly 66% intraday, marking one of the steepest declines in its trading history. The reason behind this dramatic drop is the much-anticipated demerger of Raymond’s real estate business, Raymond Realty Ltd.
This corporate restructuring move was aimed at unlocking value by separating the group’s real estate operations from its core textiles, branded apparel, and engineering businesses. While the sharp fall may have startled many investors, it’s essentially a technical price adjustment post-demerger - not a reflection of weakness in the core business.
What Triggered the Sharp Price Fall in Raymond Shares?
The primary reason for the dramatic fall in Raymond’s stock price was the demerger of its real estate arm, Raymond Realty Ltd, which officially came into effect on 1 May 2025. The record date for shareholder eligibility was 14 May 2025 .
On this date, Raymond shares turned ex-demerger - meaning any investor buying shares from this day onward won’t be entitled to receive shares in the newly formed Raymond Realty.
As a result, the share price of Raymond Ltd adjusted to reflect the value of its remaining businesses:
- Textiles
- Branded apparel
- Engineering and tools businesses
Before the demerger, Raymond’s market capitalisation included the combined value of its real estate and core businesses. Post demerger, with Raymond Realty separated, the Raymond Ltd stock had to be repriced to reflect only its standalone operations.
Key Numbers at a Glance:
- Approximate Fall: 66%
- Demerger Record Date: May 14, 2025
- Effective Date of Demerger: May 1, 2025
- Share Allotment Ratio: 1:1 (One Raymond Realty share for every Raymond Ltd share held)
- Raymond Realty Expected Listing: September quarter, FY26
Understanding the Demerger and Ex-Date Mechanics
In corporate actions like demergers, the ex-date is crucial for investors. On this date, shares begin trading without the entitlement to the corporate benefit — in this case, shares in Raymond Realty.
For investors:
- Those who held Raymond shares before the ex-date (13 May 2025) will receive one share of Raymond Realty for each Raymond share they owned.
- Those buying from 14 May onward won’t be eligible for Realty shares.
It’s also important to note that some trading platforms may display historical price data unadjusted for the demerger for a short period, potentially confusing casual investors.
Raymond Realty’s Financial Performance and Business Outlook
Despite the stock price volatility, Raymond Realty has been delivering solid financial growth. In Q4FY25, the company reported:
- Revenue: ₹766 crore (up 13% YoY)
- EBITDA: ₹194 crore
- EBITDA Margin: 25.3%
- Booking Value: ₹636 crore, driven by Thane and Bandra projects
- Net Cash Position: ₹399 crore
The company is actively expanding through joint development agreements (JDAs) in the Mumbai Metropolitan Region (MMR), with new projects in Mahim and Wadala expected to generate a gross development value of ₹6,800 crore. Its current portfolio carries a potential revenue pipeline of nearly ₹40,000 crore, suggesting robust growth prospects post listing.
Why Raymond Demerged its Realty Business: The Strategic Logic
The demerger decision wasn’t sudden — it was part of Raymond’s long-term value unlocking strategy:
- Approved by the Board in July 2024
- Cleared by NCLT in March 2025
- Effective from May 2025
Key Objectives:
- Greater operational focus for both businesses
- Unlock shareholder value by independent market valuation
- Leverage land bank and rising MMR real estate demand
- Attract sector-specific investors and strategic partners
Flashback: Raymond’s Earlier Demerger of Lifestyle Business
This isn’t Raymond’s first demerger exercise. In September 2024, it successfully spun off its Raymond Lifestyle business, listing it independently. Shareholders received 4 Raymond Lifestyle shares for every 5 Raymond shares held.
The successful completion and market response to that demerger bolstered confidence in the group’s restructuring strategy — a positive sign for the Raymond Realty listing as well.
Analyst Views: Positive Long-Term, Cautious Short-Term
The demerger has led to a mix of reactions among analysts:
- Positive on long-term value unlocking
- Cautious on near-term volatility
Most analysts currently have a ‘Buy’ rating on Raymond Ltd, post adjustment, citing healthy prospects for its textiles, apparel, and engineering businesses.
Key highlights from recent analyst commentary:
- Demerger eliminates conglomerate discount in valuation
- Enables business-specific financial management
- Favorable demand outlook for Raymond Realty
Market Outlook: Growth Potential with Risks
Both Raymond Ltd and Raymond Realty now stand as independent entities with distinct challenges and opportunities.
Raymond Ltd’s Future Focus:
- Strengthen textiles and branded apparel leadership
- Expand engineering and aerospace operations
Raymond Realty’s Growth Plans:
- Aggressive expansion via JDAs in MMR
- Leverage premium projects in Thane, Bandra, Mahim, Wadala
- Asset-light growth strategy with strong booking momentum
Conclusion: Inflection Point in Raymond Group’s Transformation Journey
The demerger of Raymond Realty marks a significant chapter in Raymond Group’s ongoing transformation. While the immediate sharp fall in Raymond’s share price post demerger was largely a technical adjustment, it highlighted the substantial valuation attributed to its real estate operations within the combined entity.
Key takeaways for investors:
- Demerger enables better valuation discovery for both businesses
- Raymond Realty has a strong financial base and growth prospects
- Raymond Ltd remains a profitable, dividend-paying core business
- Volatility may persist until Realty lists and both stocks stabilise
Investors should closely track the Raymond Realty listing timeline and Raymond’s quarterly results to assess the full impact of this restructuring.