In a surprising move that shook the markets, Raymond Ltd’s shares fell sharply by more than 66% on May 13, 2025. This massive drop came right after the demerger of its real estate business, Raymond Realty, took effect. If you’re wondering what caused this sudden fall and what it means for investors, here’s a simple breakdown of the 4 key things you should know.
1.Why Did Raymond Shares Fall So Drastically?
The main reason behind the crash is not a negative event, but a technical adjustment due to the demerger. The realty business has been spun off into a separate entity called Raymond Realty Ltd. Before the demerger, Raymond Ltd’s stock price included the value of both its textile and real estate businesses. Now, with the real estate arm carved out, the stock price has adjusted to reflect only the core businesses like textiles, engineering, and consumer products. So, while it appears that Raymond’s stock “crashed”, this is actually a normal price adjustment post-demerger.
2. What Happens to Investors’ Shares Now?
If you owned shares in Raymond Ltd before the demerger record date, you’ll receive shares in Raymond Realty Ltd as well. According to the demerger terms -Shareholders will receive 1 share of Raymond Realty Ltd for every 1 share of Raymond Ltd held. Raymond Realty Ltd will soon be listed separately on the stock exchange, giving investors the flexibility to hold or sell either stock independently. This means your total investment value may not have changed significantly — it’s now just split between two companies.
3. What’s Raymond’s Strategy Behind the Demerger?
Raymond has been working to unlock value for its shareholders. By spinning off the real estate business, it allows each business to operate independently and focus on its core strengths.Raymond Ltd will now focus purely on its textile, apparel, and consumer lifestyle businesses. Raymond Realty Ltd can now grow on its own terms in the booming Indian real estate market, especially in the Mumbai Metropolitan Region (MMR) where it has several ongoing projects. This separation helps investors make clearer decisions based on each business’s performance.
4. What Should Investors Do Now?
Don’t panic about the stock price drop – it’s a technical adjustment, not a reflection of poor performance. Once Raymond Realty gets listed, monitor both companies’ performance before making buy/sell decisions.Experts say the textile business remains strong, and the real estate business has growth potential, so holding both could offer long-term gains. If you’re a long-term investor, this could be a good time to reassess your portfolio and align it with your financial goals.
Final thoughts
The fall in Raymond’s stock price may look alarming at first glance, but it’s actually part of a planned restructuring. With two focused entities now in play, shareholders stand to benefit from improved transparency and performance tracking. As always, consult your financial advisor before making any investment decisions.