The Indian stock market witnessed a dramatic event on May 14, 2025, as Raymond share prices plummeted by nearly 66%, sparking widespread discussion among investors and market analysts. This sharp decline in Raymond share price was not driven by negative financial performance or a massive sell-off but by a technical adjustment following the Raymond stock demerger of its real estate arm, Raymond Realty. In this comprehensive article, we delve into the reasons behind why Raymond share price is falling, explore the implications of the Raymond demerger, and assess the future outlook for Raymond shares and the company’s strategic restructuring.
Understanding Raymond Ltd.: A Legacy of Diversification
Raymond, a household name in India, is renowned as the largest integrated manufacturer of worsted fabric globally. Beyond textiles, the company has diversified into branded apparel, engineering, FMCG, and real estate, making it a multifaceted conglomerate. Listed on both the BSE and NSE, Raymond stocks have been a staple in many investor portfolios, known for their stability and growth potential. However, the recent Raymond share news surrounding the demerger has shifted the spotlight to its real estate division and the restructuring strategy led by Chairman and Managing Director Gautam Hari Singhania.
The Raymond Realty Demerger: A Strategic Move
The Raymond demerger of its real estate business, Raymond Realty, was finalized on May 1, 2025, with May 14, 2025, set as the record date to determine eligible shareholders. Under the approved scheme, shareholders receive one fully paid-up equity share of Raymond Realty (face value ₹10) for every share held in Raymond Ltd. This 1:1 allotment ensures that investors now hold stakes in two separate entities: Raymond Ltd., focusing on textiles, engineering, and other core businesses, and Raymond Realty, a standalone real estate powerhouse.
The demerger is part of Raymond’s broader strategy to unlock shareholder value by creating focused verticals. This follows the successful demerger and listing of Raymond Lifestyle in September 2024, which separated the lifestyle and apparel business. The Raymond stock demerger aims to enhance operational efficiency, attract specialized investors, and capitalize on the growth potential of India’s competitive real estate market.
Why Raymond Share Price is Falling: A Technical Adjustment
On May 14, 2025, Raymond shares opened at approximately ₹530, a stark contrast to the previous day’s closing price of ₹1,561.30, reflecting a 66% drop. This decline led to Raymond stocks hitting a 52-week low of ₹523.10, with the market capitalization standing at ₹3,704.5 crore. However, market experts clarified that this was not a crash driven by fundamental weaknesses but a notional price adjustment due to the stock trading ex-date for the demerger.
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When a stock goes ex-date for a demerger, its price no longer includes the value of the spun-off entity—in this case, Raymond Realty. As a result, the Raymond share price was adjusted to reflect only the value of the remaining businesses (textiles, engineering, etc.). Investors, however, have not lost value; their holdings are now split between Raymond Ltd. and the soon-to-be-listed Raymond Realty, expected to debut on the NSE and BSE by the September quarter of FY26.
The confusion was exacerbated by some mobile trading apps displaying unadjusted prices, leading to the perception of a massive sell-off. Despite the initial shock, Raymond shares hit a 5% upper circuit at ₹556.45 on the BSE, signaling investor confidence in the company’s fundamentals post-demerger.
Raymond Realty: A Financial Powerhouse
Raymond Realty emerges as a robust entity post-demerger, with strong financials and a promising growth trajectory. In Q4 FY25, the real estate business reported a booking value of ₹636 crore, driven by premium projects such as The Address by GS 2.0, Invictus, and Park Avenue – High Street Retail in Thane, alongside a joint development agreement (JDA) project in Bandra. The division recorded revenue of ₹766 crore, a 13% year-on-year increase, with an EBITDA of ₹194 crore and a healthy 25.3% margin.
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Raymond Realty is net cash surplus with ₹399 crore and boasts a project pipeline worth ₹40,000 crore, including ₹25,000 crore from its Thane land parcel and ₹14,000 crore from JDA projects. Recent agreements in Mahim and Wadala, valued at ₹6,800 crore, further strengthen its portfolio. This financial momentum positions Raymond Realty as a key player in India’s real estate sector, attracting investor interest as it prepares for listing.
Financial Performance of Raymond Ltd.
Despite the demerger, Raymond Ltd. remains financially sound. For the quarter ended March 2025, the company reported a consolidated net profit of ₹137.47 crore, down 40% from ₹229.79 crore in the same period last year, primarily due to the restructuring impact. Total income for the quarter was ₹713.45 crore, reflecting a revenue contraction of 77.33%, the first in three years, largely attributed to the real estate business spin-off. However, the company delivered an impressive return on equity (ROE) of 205.35% for the year ending March 31, 2025, outperforming its five-year average of 62.22%.
Raymond’s engineering and aerospace segments are also gaining traction, focusing on sunrise sectors like electric vehicles (EVs). The company’s strategic diversification and restructuring efforts underscore its commitment to long-term growth and shareholder value creation.
Market Context and Investor Sentiment
On May 14, 2025, the BSE Sensex rose 0.39% to 81,462.23, indicating a positive market environment despite the Raymond share price adjustment. Posts on X reflected mixed sentiment, with some investors initially alarmed by the price drop but others recognizing the demerger’s long-term benefits. For instance, @ZeeBusiness noted the 66% tumble but emphasized it as a technical adjustment, while @ETMarkets provided clarity on the ex-date mechanics.
Foreign institutional investors (FIIs) held 15.64% of Raymond stocks as of March 31, 2025, up slightly from 15.38% in December 2024, while domestic institutional investors (DIIs) held 6.83%. The public shareholding stood at 28.66%, with mutual funds accounting for 3.86% of DII holdings. This stable institutional backing suggests confidence in Raymond’s post-demerger prospects.
Future Outlook for Raymond Shares
The Raymond demerger positions both Raymond Ltd. and Raymond Realty for focused growth. Raymond Ltd. will continue to leverage its leadership in textiles and expand its engineering and aerospace segments, while Raymond Realty is poised to capitalize on India’s booming real estate market. The demerger enhances transparency, attracts sector-specific investors, and unlocks value by allowing each entity to pursue independent strategies.
Investors holding Raymond shares before the record date (May 14, 2025) will benefit from owning shares in both companies, potentially doubling their exposure to growth opportunities. Analysts expect Raymond Realty’s listing in September 2025 to generate significant interest, given its strong financials and ₹40,000 crore project pipeline. Meanwhile, Raymond Ltd.’s diversified portfolio and robust ROE provide a solid foundation for recovery and growth.
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Conclusion: A Strategic Opportunity for Investors
The 66% drop in Raymond share price on May 14, 2025, may have startled investors, but it reflects a strategic restructuring rather than a fundamental weakness. The Raymond stock demerger of Raymond Realty is a calculated move to enhance shareholder value, streamline operations, and position both entities for long-term success. As Raymond shares stabilize and Raymond Realty prepares for its market debut, investors have a unique opportunity to participate in the growth of two focused businesses.
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For those seeking the latest Raymond share news or wondering why Raymond share price is falling, the answer lies in the transformative power of the demerger. By staying informed and consulting with financial advisors, investors can navigate this transition and capitalize on the potential of Raymond stocks in a dynamic market.
Source:
- ET Now
Disclaimer:
The information provided in this article is for informational and educational purposes only and does not constitute financial, investment, or professional advice. The content is based on sources believed to be reliable, including Business Standard, Zee Business, Economic Times, ET Now, and Moneycontrol, but no guarantee is made regarding its accuracy, completeness, or timeliness. The Raymond share price, financial data, and market analysis reflect conditions as of May 14, 2025, and are subject to change. Investing in stocks, including Raymond Ltd. and Raymond Realty, involves risks, and past performance is not indicative of future results. Readers are advised to conduct their own research and consult with qualified financial advisors before making investment decisions. The author, publisher, and any affiliated entities are not liable for any losses or damages arising from the use of this information.