Raymond shares opened with a nearly 40% drop on July 11, 2024. This sharp decline was due to the stock turning ex-date for the demerger of its lifestyle business. This meant that the stock was trading at a value that excluded the lifestyle business, which was being spun off into a separate entity.
Meanwhile, it’s also important to note that the share price gain slightly or we can say rebounded due to buyers interested . This suggests that investors recognized the potential value in the remaining businesses (engineering and real estate).
Raymond shares began trading ex-lifestyle business, meaning the value of the lifestyle business was no longer included in Raymond’s share price. This was due to the demerger of Raymond’s lifestyle business into a separate entity, Raymond Lifestyle.
Why Raymond Share Fall 36%? Here’s Key Points Summary
- Record Date: July 11, 2024, was set as the record date for the demerger.
- The Share Exchange Ratio: Shareholders of Raymond received four equity shares of Raymond Lifestyle for every five equity shares of Raymond held.
- Listing of Raymond Lifestyle: The new entity is expected to be listed on the stock exchanges by September 2024.
- Share Price: Raymond share opened lower on July 11th due to the removal of the lifestyle business value, but later rebounded and hit an upper circuit.
The demerger created three separate entities:
- Raymond: Focused on engineering.
- Raymond Lifestyle: A new publicly listed company focused on the lifestyle business.
- Future Real Estate Business: A potential third entity that may be created in the future.
While the initial fall in Raymond’s share price might seem concerning, it’s important to understand that this was due to the demerger and does not necessarily reflect the company’s overall financial health or future prospects. In fact, some analysts believe that the demerger could unlock value for shareholders in the long run.