Raymond share rises as company plans to consolidate other activities
- Actions of
Raymondjumped more than 5% at the start of trading on Tuesday following the company’s announcement to consolidate some of its activities.
- The company’s automotive tooling and equipment and components business will be amalgamated into an engineering business.
- Its real estate activity will be incorporated as a wholly owned subsidiary.
Engineering textile conglomerate Raymond has announced a restructuring plan to merge some of its activities into one and monetize its assets.
With this, the company will consolidate its business segments with the parent company in which the tools and hardware and automotive components business will be merged into a new segment for engineering business. During this time, the real estate business will be incorporated into a wholly owned subsidiary.
The consolidation plan will improve synergies and provide an opportunity for business monetization and deleveraging. Apparently, Raymond had a gross debt of 2,470 crore as of March 31, according to Crisil’s research. This resulted in price gains for Raymond stock on Tuesday, which gained 5% at the start of trade. Later at 3:00 p.m., the company’s shares rose 2.7% to 460 yen per share.
With a focus on accelerating the recovery from the coronavirus outbreak, the company will consolidate its B2C business by transferring its clothing business to parent company Raymond, the company said.
The company said that “this move will increase efficiency, streamline and simplify processes and bring synergies in terms of design and innovation, sourcing and retail network.”
“We are consolidating the business to explore all of our options for monetization, which will enable deleveraging leading to value creation,” said Gautam Hari Singhania, chairman and CEO of Raymond in a statement to BSE.
Raymond had reported a consolidated loss of ₹ 157 crore in the June quarter compared to a loss of ₹ 242 crore in the same quarter of the previous year.
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