Gautam Singhania says Raymond Lifestyle set to list next week, demerged verticals will create value

Raymond group announced the demerger of its apparel business last year to put in place a focused strategy with respect to three clear lines of businesses – real estate, lifestyle and engineering. The real estate vertical is expected to list next year.

Raymond Lifestyle, the demerged entity that will house all apparel-related businesses of the group, is expected to make debut on the bourses in the coming week, Gautam Singhania, chairman and managing director of Raymond has said.

The group announced the demerger of its apparel business last year, putting in place a strategy of three verticals of businesses – real estate, lifestyle and engineering. The real estate vertical is expected to list next year. Singhania also confirmed that the group has lined up plans for expansion of its clothing business.

“What we are doing is that we are trying to create shareholder value. We had two businesses – lifestyle and engineering/auto. And in the last five years, we started the real estate business,” Singhania told Moneycontrol in an exclusive interaction.

“We announced the demerger of the lifestyle business last year. The lifestyle company should list hopefully next week, sometime. We have significantly scaled up the real estate business as well. We believe both these businesses will require their own structures to run. So, we have also announced the demerger of the real estate business as well. So, we will have three companies – real estate, lifestyle and engineering,” Gautam Singhania said.

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

The group is putting in place separate corporate structures for all the three verticals, with Singhania as part of all the boards.

“Each company will have its own board, CEO and management structure. Going ahead, it would prove to be the best setup for creating shareholder value as each company will have its own strategy. I will be on the boards (of the three companies),” he said.

The Raymond Group has an aggressive expansion strategy for the lifestyle business that starts to trade as a separate company on bourses next week. The group currently has a network of over 100 stores and it plans to open another 300 in the current financial year.

Raymond as a brand enjoys strong recall and legacy value in the wedding segment, especially suits, though there is increased competition in the ethnic and Indian wear space with brands like Manyavar making inroads.

Vedant Fashions - the makers of Manyawar - made its stock market debut in February 2022 and has gained around 20.5 percent in the last three months, though it is down marginally on one year basis.

Shares of Raymond have gained a little over 10 percent in the last six months, though the stock has remained largely flat in the last one year. Over a five-year period, the stock has surged more than 250 percent.

Also Read: Free of net debt, Raymond to spin off lifestyle business as separate listed entity

Singhania backs Raymond Lifestyle for its end-to-end solution in apparels. “We are the only company that is the sum of all other companies. We have ethnic, garments, wedding segment, sleepwear, and shirting. We are a totally integrated solution hence the value and the brand. We are still the largest in the wedding segment. In the ethnic segment, we were slow to start but we have caught up… I have launched sleepwear and the response has been encouraging. I am launching innerwear. They are all different verticals but the mother brand – Raymond -- is also expanding,” he said.

“The legacy businesses should grow at 7-10 percent. The new segments are at different stages of maturity. If you take shirting, today it is at 25 million meters, the vision is to take it to 60-70 million. There are many more verticals that we will launch and that is where exponential growth will happen,” Singhania added.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.