Investors cheer Raymond’s restructuring plan to reduce debt
- Shares of
Raymondsurged more than 5% in early trade on Tuesday on the company's announcement to consolidate some of its businesses.
- The company’s tools & hardware and auto components businesses will be merged into an engineering business.
- Its real estate business will be formed into a wholly owned subsidiary.
AdvertisementTextile-to-engineering conglomerate Raymond announced a restructuring plan to merge some of its businesses into one and monetise its assets.
With this, the company will consolidate its segments of business with the parent company wherein tools & hardware and auto components businesses will be merged into a new segment for engineering business. Meanwhile, the real estate business will be formed into a wholly owned subsidiary.
The consolidation plan will improve synergies and provide an opportunity to monetise businesses and pare debt. Reportedly, Raymond had a gross debt of ₹2,470 crore as of 31 March, as per Crisil research.
This resulted in price gains for Raymond’s stock, on Tuesday, which gained 5% in the early trade. Later at 3:00 p.m., shares of the company were up 2.7% at ₹460 per share.
With a focus to fast track recovery after the coronavirus outbreak, the firm will be consolidating its business-to-consumer business by transferring its apparel business into parent company Raymond, said the company.
The company said, “the move will strengthen efficiencies, streamline and simplify processes and bring in synergy benefits in terms of design and innovation, sourcing and retail network.”
“We are consolidating the business to explore all options available to us for monetisation, which will enable deleveraging leading to value creation,” said Gautam Hari Singhania, chairman and managing director at Raymond in a statement to BSE.
Raymond had reported a consolidated loss of ₹157 crore in June quarter as compared to loss of ₹242 crore in the same quarter previous year.
SEE ALSO: Finolex Cables under pressure after two advisory firms accuse the firm of poor corporate governance
Take a deeper look at the meteoric rise of Glance that may have caught Mukesh Ambani’s eye
Popular on BI
- Exploring India's majestic glaciers: 10 frozen wonders
- New fund alert: 'Axis India Manufacturing Fund'
- Anti-collision system KAVACH, Delhi-Kolkata, Delhi-Mumbai corridor to see completion in 2024-25: Vaishnaw
- Top 10 places to visit in India in December
- 10 Amazing health benefits of Aloe Vera