Raymond Group, having an interest in Textile & Apparels, Real Estate, FMCG and Engineering products has decided to streamline its corporate structure. In pursuant to this, the company will separate its lifestyle business division to separate company & later to list it separately.

Raymond Limited (Raymond) is India’s largest integrated worsted suiting manufacturer that offers end-to-end solutions for fabrics and garmenting. Over the years, Raymond has been synonymous with quality, innovation and market leadership. It has some of the leading brands within its portfolio – Raymond Ready to Wear, Park Avenue, ColorPlus, Parx, Raymond Made to Measure amongst others. Raymond has one of the largest exclusive retail networks in the country with over 1500 stores across 601 towns. As a part of the diversified Group, it also has business interests in men’s accessories, personal grooming & toiletries, prophylactics, engineering and auto components across national and international markets.

Raymond-Demerger-Core-Business-1

The Transaction

The company will demerge its core lifestyle business to a new company. The lifestyle business will include the business of branded textile, branded apparel & garments. After the demerger, the lifestyle business company will get listed on bourses with mirror shareholding structure.

The existing company will predominantly become a real estate company having an interest in the business of Real Estate, B2B Shirting Business, Engineering business of Auto components and tools & hardware, Denim and FMCG business.

The appointed date for the transaction is 1st April 2020.  Every shareholder of Raymond Limited will be issued the shares of a new company in the ratio of 1:1.

Raymond-Demerger-Core-Business-2

The reason given by the management for keeping High Value Cotton Shirting business in the existing company is its existing litigation with JV partner which is being contested at NCLT and the matter is sub-judice. NCLT has passed an order freezing shareholding of RLCL and sale or transfer fixed assets of RLCL in which JV partner has an interest. Once the matter is solved, the company will come out with some mechanism to transfer this business to lifestyle business.

Earlier it was announced by the company that the existing company will grant perpetual brands usage rights for the “Raymond” brand to the Lifestyle Company at a brand royalty to be charged at a percentage of Turnover with a cap, in line with the best market practices, however, considering the objections from various investors, it is decided to that the brand licensing relating to the “Raymond” name relating to lifestyle business will get demerge with the business.

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  • Viswambharan Dattaguru says:

    Good article

    • Thank you very much Sir.