Business India has been following the Raymond story for some years now. The last time we wrote a cover story was over 5 years ago. At that time, we had said that this was an old company worth watching – though at time the focus was on the divisions of the parent company. The plans to spin off the divisions into separate, listed companies had not even been discussed. At that time, we believed that the company was significantly undervalued.
More recently, some peripheral businesses were sold and the spin-off plans have been initiated with Raymond Lifestyle, already a separate listed company. On the business front the companies are doing well and have more than doubled in value to cross over Rs10,000 crore (in combined value).
However, for a while there have been concerns in the market about issues in Gautam Singhania’s personal life, that have been an overhang on the company’s valuation. There were concerns about the high profile (and cost) of his lifestyle. And then, in his family, the unfortunate squabbles with his father and brother and later with his wife did impact the valuation too. To be fair, it is certainly appropriate to argue that personal life of the Chairman, is a purely personal matter, in which the public has no concern. But the reality is that globally, markets are concerned about the personal lives of CEOs. In recent years, in the UK and the US, the focus has often been on the sex lives of CEOs, with several leading and well performing CEOs being forced to step down due to their sexual conduct and relationships.
But having said all this, fortunately these issues are now well behind Gautam Singhania, which allows a focus on his companies and their performance.
Raymond Lifestyle Ltd, which includes the historical textile and garmenting business has performed well since it was spun off last year at the peak of the market. And while the IPO price was Rs1,573, it has, with much of the market, come down to approximately Rs1,000. However, leading brokerages are forecasting a doubling of the price.
The current focus is on the listing of Raymond Realty. The demerger will consolidate the group’s real estate business under a single entity, which, going forward, will further unlock the firm’s potential as a pure-play property development vertical. The company started its first project in 2019. In the last 6 years, it has built a significant presence in Thane and Mumbai in MMR. MMR is India’s most valuable property market and is one of the leading contributors to pan-India launches and sales. Beyond Mumbai, the company is exploring project opportunities to enter the Pune property market.
The company plans to double its sales and portfolio size in the next 3-4 years. Raymond Realty is focusing on the quality of projects, timely delivery, and post-delivery service. The company has also started its own facilities management arm. By the end of FY26, it plans to launch six projects – two in suburban Thane, where Raymond owns about 100 acres, and four projects in different locations across the Mumbai Metropolitan Region (MMR) – Wadala, Sion, Mahim, and Bandra. The public places trust in strong brands that have delivered quality projects, within the price contacted and in time. Companies like DLF, Raheja’s, L&T, Tatas and Godrej Properties have developed their reputations in this manner, earning public trust. Also, their projects sell out quickly even though priced at a small premium. This is the route Raymond Realty will follow while remaining largely debt free. Raymond will command a premium in the stock markets too.