M&A Critique

RAYMOND’s: Creating Value or Confusion!

In 2019, following the industry trend, Raymond Limited announced demerger of “Branded Apparel Business” paving the way for its listing. The move was intended to separate the core activity from other activities such as Real Estate, Auto Components, Engineering, etc., which the group transformed over a period. Two years have passed but the company had not received approval from the Honorable National Company Law Tribunal (NCLT).

Recently, Raymond Limited at its board meeting withdrew the scheme and proposed a revised restructuring scheme. The new internal restructuring is totally opposite of what was proposed earlier and seems that it is locking the various businesses under Raymond Limited.

Overview of the companies:

Raymond Limited (Raymond) is India’s largest integrated worsted suiting manufacturer that offers end-to-end solutions for fabrics and garments. Over the span of years, Raymond has transformed from a textile company to a large, diversified group having interests in men’s accessories, personal grooming & toiletries, prophylactics, engineering, and auto components.

Raymond Apparel Limited (RAL) is a Wholly Owned Subsidiary (WoS) engaged in the business of branded B2C apparel.

JK Files (India) Limited (‘JK Files’) a wholly-owned subsidiary of Raymond, engaged in the manufacturing steel files and cutting tools and markets, hands tools and power tools.

Ring Plus Aqua Limited (‘RPAL’) a step-down subsidiary of Raymond Limited engaged in the business of Auto Components.

Scissors Engineering Products Limited (‘SEPL’) a wholly-owned subsidiary of Raymond which holds 89.07% equity stake in RPAL.

The Transaction:

The following internal restructuring has been proposed by Raymond:

  1. Demerger of B2C business undertaking including shares in Colorplus Realty Limited, J.K. Investor (Bombay) Limited and Accurate Finman Services Limited of RAL into Raymond.
  2. Consolidation of Tools & Hardware and Auto Components Businesses into JK Files (India) Limited. The Auto Components business being conducted by Ring Plus Aqua Limited (‘RPAL’), a step-down subsidiary of Raymond Limited. Raymond entered into an agreement with JK Files, to transfer its entire shareholding in Scissors Engineering Products Limited, a wholly owned subsidiary of Raymond which holds investment in RPAL into JK Files, thus effectively making RPAL a step down subsidiary of JK Files; and
  3. Subsidiarisation of the Real Estate Business: The board gave in principal approval for subsidiarisation of a Real Estate Business into a wholly owned subsidiary by way of a slump sale/demerger or any other suitable mode. The Real Estate business shall consist of approximately 40 acres including current resident project at Thane. The balance 40-acre land will continue to be in Raymond Ltd which will be monetized in due course of time.

The Appointed Date for the demerger is 1st April 2021.


As mentioned in the Scheme, the entire B2C Apparel business of RAL will be transferred to Raymond except:

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Padam Singh