The Board of Raymond Limited has approved consolidation of Tools & Hardware and Auto Components businesses into Engineering business for improving synergies and exploring monetization options for deleveraging Raymond Ltd.
The overall objective being value creation for shareholders. The engineering business has achieved scale and improved market share in both domestic and global markets. These businesses have demonstrated growth in EBITDA margins, generated free cash flows and are debt free, the company said in its exchange filing.
“Our Real Estate business launched in 2019 which started development of land in Thane is now poised for growth with a focus on delivering a value based offering. The real estate business will deliver around 3 million sq. ft. of residential projects and we have already achieved sales of over 70% of launched inventory of ~2 million sq. ft. In a short span of time we have witnessed a good traction for the product offered by us. The Real Estate division is a sustainable profitable business led by experienced professional team with a clear long term strategy in place. Real Estate business now plans to capitalize on its strengths by extending beyond Thane. To achieve the high growth momentum in real estate business, the board has also given an in‐principle approval for subsidiarization of real estate business division through a wholly owned subsidiary,” the company said.
With a focus to fast track the recovery post pandemic Raymond will consolidate its B2C business by transfer of Apparel Business into Raymond Ltd. This move will strengthen efficiencies, streamline & simplify processes and bring in synergy benefits in terms of design & innovation, sourcing and retail network, the statement said.
Commenting on this development, Gautam Hari Singhania, Chairman & Managing Director said, “Raymond believes in nurturing and growing each of its businesses. I am happy to share that our Engineering business comprising of Tools & 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 monetization, which will enable deleveraging leading to value creation. Additionally, our Realty business has showcased performance since its launch and in order to realize its full potential it will now be a wholly owned subsidiary of Raymond Limited. We continue to focus on our B2C business by bringing in operational efficiencies and synergies to strengthen our Lifestyle business”.
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