Raymond Share Price Drops 66% Amid Demerger: What Really Happened?

Shares of Raymond Ltd. fell sharply by approximately 66% on May 14, 2025, dropping from around ₹1,561.30 to ₹530 in a single trading session. This dramatic decline was not due to any fundamental weakness, panic selling, or negative news, but was a technical adjustment related to the demerger of its real estate business, Raymond Realty.

Why Did the Raymond Share Price Drop So Much?

Ex-Date for Demerger: May 14 was the record date to determine which Raymond shareholders would receive shares in the newly demerged Raymond Realty. On this date, Raymond Ltd. stock turned “ex-demerger,” meaning it started trading without the value of the real estate business included in its price.

Technical Price Adjustment: The 66% fall reflects the removal of Raymond Realty’s value from Raymond Ltd.’s market capitalisation. This is a standard practice during demergers and does not indicate a loss in overall shareholder value

Shareholder Impact: Shareholders of Raymond Ltd. will receive one share of Raymond Realty for every share held in Raymond Ltd. as compensation for the value transferred out of Raymond Ltd..

What Does This Mean for Investors?

No Real Loss in Value: The apparent crash is a notional adjustment. Investors now hold shares in both Raymond Ltd. (which no longer includes the real estate business) and, soon, in the separately listed Raymond Realty.

Raymond Realty Listing: Raymond Realty is expected to be listed as an independent entity by the September quarter of FY26, allowing shareholders to realize the value of both businesses directly

Strategic Rationale: The demerger is part of Raymond Group’s broader strategy to unlock value by creating focused, independent business verticals. This follows a similar demerger of its lifestyle business in 2024.

Key Financials of Raymond Realty

FY25 Q4 Revenue: ₹766 crore (13% year-on-year growth)

EBITDA: ₹194 crore (margin of 25.3%)

Booking Value: ₹636 crore for the quarter

Strong Project Pipeline: Major developments in Thane and Mumbai, with significant future revenue potential.

Summary Table: What Changed for Raymond Shareholders?

The 66% drop in Raymond Ltd.’s share price is a technical adjustment reflecting the spin-off of its real estate business, not a sign of distress or loss for shareholders. Investors will soon own shares in both Raymond Ltd. and Raymond Realty, with the combined value expected to be in line with pre-demerger levels

Understand the Situation

The sharp 66% drop in Raymond Ltd.’s share price is a technical adjustment due to the demerger of its real estate business, Raymond Realty, not a sign of business distress or value destruction.

Shareholders as of the record date (May 14, 2025) will receive one share of Raymond Realty for every share of Raymond Ltd. held

Raymond Realty is expected to be listed on the NSE and BSE by the September quarter of FY26, after which you can trade both Raymond Ltd. and Raymond Realty shares independently.

For Existing Shareholders

Hold Your Position: If you already own Raymond shares as of the record date, you will soon receive shares of Raymond Realty. The combined value of Raymond Ltd. and Raymond Realty should, in theory, reflect the pre-demerger value over time as the market adjusts.

Wait for Listing: You cannot trade Raymond Realty shares until they are officially listed (expected by September quarter FY26). Until then, your investment’s full value may not be visible in your portfolio.

Evaluate Both Entities: Once Raymond Realty lists, assess the fundamentals and prospects of both companies. Raymond Ltd. will focus on engineering and other core businesses, while Raymond Realty will be a pure-play real estate company with a strong pipeline and revenue potential.

For New Buyers (Post-Demerger)

Raymond Ltd. Only: If you buy Raymond Ltd. shares after the ex-date (May 14, 2025), you will NOT receive Raymond Realty shares. The current Raymond Ltd. price reflects only the non-realty businesses.

Wait for Realty Listing: If you are interested in the real estate business, you must wait until Raymond Realty is listed to buy its shares directly.

Investment Considerations

Raymond Realty Growth: The real estate arm has a robust project pipeline, including 100 acres in Thane, multiple joint development agreements (JDAs), and total revenue potential of up to ₹40,000 crore. The company targets 20–25% annual growth in booking value and a 20% CAGR in revenue and profit.

Strategic Rationale: The demerger allows both companies to focus on their core strengths and unlock value for shareholders.

Market Volatility: Both stocks may experience volatility around the listing of Raymond Realty and as the market reassesses the standalone value of each business.

Actionable Steps

Existing Investors: Hold your shares and monitor announcements about the Raymond Realty listing. Reassess your portfolio after both stocks are tradeable.

Potential Buyers: Decide which business aligns with your investment goals-engineering (Raymond Ltd.) or real estate (Raymond Realty)-and plan to buy accordingly after the Realty arm lists.

Long-Term View: Both entities are positioned for growth in their respective sectors. Consider holding for the long term to benefit from the group’s value-unlocking strategy.

Summary Table: What to Do Now

There is no cause for panic. The price drop is a technical adjustment, and the real value will become clear after Raymond Realty lists. Stay informed, evaluate both businesses, and align your investments with your sector preference and risk appetite.