Raymond committed to creating sustained shareholder value across businesses: Gautam Singhania

Committed to creating sustained shareholder value across group businesses: Gautam Singhania

Raymond Group, which has recently announced the demerger of its real estate business, will aggressively pursue an asset-light joint development model for its future projects, which will ensure robust free cash flows, Gautam Singhania, Raymond’s chairman and managing director, told Moneycontrol in an exclusive interaction.

The planned demerger will create a pure-play real estate arm that will develop projects in the Mumbai Metropolitan Region (MMR), which is expected to unleash a Rs 2-lakh-crore market opportunity for real estate players. “In real estate, our competitive advantage lies in our proven track record of timely project delivery and customer satisfaction. We differentiate ourselves through superior execution and quality, which are pivotal in sustaining market leadership amid competitive dynamics,” Singhania said.

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The 99 year old group has a presence in three district verticals - lifestyle products (textiles and apparels), engineering products, and real estate, the most recent addition. The company started its real estate business around five years ago initially developing its captive land parcel for residential projects in Thane, near Mumbai, and has since announced several joint development projects across the city focusing on the affordable luxury segment, with apartments costing between Rs 2.7 crore and Rs 5 crore, excluding stamp duty and other charges.

“We are aiming to create three distinct companies. This move (demerger) allows us to focus more sharply on each vertical — lifestyle, real estate, and engineering — tailoring strategies and management bandwidth accordingly," Singhania said. “Each company will have its own governance, management teams, and capital structure, which we believe will unlock significant shareholder value. Raymond's iconic brand remains a cornerstone across all our businesses."

Also Read: Raymond board approves plan for real estate business demerger

The record date of demerger of the lifestyle businesses announced in April last year is July 11 and the company expects the lifestyle business housed under Raymond Consumer Care Limited ( RCCL) to be listed in the next two months. It will be followed by listings of the engineering and real estate verticals separately. With the listing of RCCL, shareholders of Raymond Ltd will get four shares of RCCL for every five shares held through a swap. Subsequently, shareholders of Raymond limited will get one share each of real estate and engineering businesses.

The expansion plan for the lifestyle segment will be led by Exclusive Brand Outlet (EBO) expansion and new product lines. EBO expansion will be done by adding 250-300 stores in 12-18 months (as against 409 EBOs in FY24). Product expansion will include the launch of its sleepwear brand SleepZ by Raymond and will be distributed via distributors across India. Its Park Avenue Innerwear range will be launched in the next three-four months .

Looking ahead, Raymond Lifestyle Limited plans to expand both domestically and internationally post-demerger. Singhania hinted at potential acquisitions aligned with growth objectives, alongside strategic franchise-led expansions and product diversification. Financially, Raymond intends to utilize free cash flows to support strategic investments in real estate development and engineering advancements. ‘“ Free cash flows will primarily support growth initiatives across our businesses, including strategic investments in real estate projects and operational expansions in engineering” Singhania said.

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Also Read: Raymond will soon become world's 3rd-largest suit maker: CFO Amit Agarwal

Singhania also highlighted Raymond's transition towards higher-value solutions in the engineering sector, particularly in defence and aerospace. He underscored the potential to capitalise on specialised manufacturing capabilities and high-demand sector opportunities. “We have identified the defence and aerospace sectors as opportunities to enhance our capabilities further up the value chain. This strategic move has allowed us to offer comprehensive solutions and positioned us favorably in sectors like aerospace and defense,” he told Moneycontrol.

“As global manufacturing costs escalate, there's a compelling case for consolidation and specialisation. For instance, our acquisition of a Maini Precision specialising in titanium machining for aerospace has positioned us uniquely to capitalise on high-value, specialised manufacturing needs.”

Also Read: Raymond forays into aerospace, defense & EV components biz with Rs 682 crore acquisition

On the key issue of succession, Singhania, now 58, maintained that there is already a plan in place which is yet to be disclosed publicly. Succession planning is a critical aspect of our governance. "While specifics are confidential, rest assured, it's a well-considered and robust process. Our priority is to ensure seamless leadership transition when the time comes, safeguarding the interests of our employees, shareholders, and stakeholders alike,” he said.

In May, Raymond re-appointed Singhania as its managing director for a term of five years, effective from July 1. His reappointment came in the middle of an ongoing settlement dispute with his estranged wife Nawaz Modi Singhania after the couple announced separation in November last year. Since then Nawaz has been removed from the boards of several group companies that include JK Investors (Bombay), Raymond Consumer Care, and Smart Advisory and Finserve.

She, however, remains on the board of flagship Raymond Ltd as a non-executive director. The stock of Raymond has rallied by more than 75 percent in the last one year period and has a current market cap of Rs 20,879 crore.