Raymond Shares Fall 65%: Why Are Investors Worried? Here’s the Real Reason

On Tuesday the 14th of May, Raymond Limited’s stock fell drastically (up to 65%) while being traded. This sudden decline surprised many investors and caused them a lot of worry. By 1 PM, the stock was being traded at ₹556 – much less than the closing price the last instant at ₹556.30 – a drop of more than 64.36% from the previous closing price.

However, don’t panic as this significant drop did not happen on the back of any bad news or company’s loss. The fall occurred after a technical change after Raymond’s real estate business, Raymond Realty was demerged.

What’s This Demerger About?

14 May was the demerger record date for the Raymond Realty. It means that the company determined who of its shareholders would receive shares in Raymond Realty. According to the plan, each shareholder of Raymond limited will receive,1 share of Raymond realty for every share they hold in raymond limited.

No Real Loss in the Value of Investment

Although the stock price of Raymond Limited dropped, the investors have not really lost money as they would also have gained when they bought the shares. That is because now they own shares in two different companies (Raymond Limited and soon to be listed company – Raymond Realty ). The amount of total money invested at their hands is still about the same; only that it is divided into two stocks.

Raymond Realty is likely to be listed out as a separate entity by Q2 of the financial year of 2026. Prior to that, the stock of Raymond Limited will only portray the core businesses, without real estate.

Not Raymond’s First Demerger

This is the second large scale demerger by Raymond Group. Raymond Ltd. divided the apparel and fashion business in September 2024; they listed Raymond Lifestyle as a separate company.

Raymond Realty Shows Strong Growth

Raymond Realty has proved to deliver a strong performance in FY 2025. In the fourth quarter of 2022, it has a revenue of ₹766 crore, which is up by 13% year-on-year. The company was also able to obtain ₹636 crore in booking value due to some major projects such as GS 2.0, Invictus, Park Avenue – High Street Retail and The Address by GS (Bandra, JDA-based).

The firm boasts of an impressive EBITDA of ₹194 crore (EBITDA margin of 25.3%) and has ₹399 crore of net cash reserves – evidence of sound financial health.

Also Read : How to Pick Good Stocks in the Indian Market 2024

Conclusion

A planned demerger and technical adjustment cause the fall in the share price of Raymond and not any business failure, or bad news. The investors now have two valuable assets instead of one and with good performance of Raymond Realty, there is hope for returns in future.