Mumbai-based textile and apparel maker Raymond Ltd said on Thursday it will demerge its core lifestyle business into a separate firm that will be listed on stock exchanges.
The move will create a clear demarcation of lifestyle and other businesses, leading to the simplification of the group structure, Raymond said in a stock-market disclosure.
Gautam Hari Singhania, chairman and managing director at Raymond, said demerging the core lifestyle business is an affirmative step towards enhancing performance and delivery across verticals.
The new company will house the branded textile, branded apparel and garmenting businesses. The existing company will retain a real estate project, the Thane land bank, the business-to-business shirting business, and the denim and FMCG business. It will also retain the engineering businesses of auto components and tools and hardware, Raymond said.
Under the demerger proposal, Raymond shareholders will be issued an equal number of shares of the new company.
Raymond houses leading brands such as Park Avenue, ColorPlus and Parx. The apparel maker claims to have one of the largest exclusive retail networks in the country with over 1,500 stores in more than 600 cities and towns.
The diversified group also has business interests in men’s accessories, personal grooming and toiletries, prophylactics, engineering and auto components across national and international markets.
Raymond also said that it will raise Rs 350 crore by issuing equity shares and compulsorily convertible preference shares to JK Investo Trade (India) Ltd, an associate company. The amount is the net proceeds of JKIT’s land sale deal announced last month, Raymond said. It said that it will use the money to repay its debt.