Raymond Limited gets board approval for business consolidation

Raymond Limited said that its board has sanctioned the consolidation of the company’s tools & hardware and auto components businesses into the engineering division.

According to the Indian conglomerate, the consolidation of its business units is aimed at boosting synergies and exploring monetization options for its deleveraging. The overall goal of the move is to generate value for shareholders, said Raymond Limited.

The company said that its engineering business has achieved scale and enhanced its market share in domestic as well as global markets. The tools & hardware and auto components businesses have shown growth in EBITDA margins, achieved free cash flows, and are free from debt, said the group.

Raymond Limited said that its real estate business, which was launched in 2019, will deliver nearly three million square feet of residential projects. In order to achieve the high growth momentum in the business, Raymond Limited’s board has also issued an in‐principle approval for subsidiarization of the real estate business unit via a fully-owned subsidiary.

The Indian conglomerate said that for expediting its recovery post the Covid-19 pandemic, it will consolidate its B2C business by transferring its apparel business into Raymond Limited.

The group said that the move will consolidate efficiencies, optimize and simplify processes and drive synergy benefits in terms of innovation and design, sourcing and retail network.

To enable and implement the decisions, Raymond Limited said that it has dropped the de‐merger scheme of its lifestyle business, which was announced in late 2019.

Gautam Hari Singhania — Chairman and Managing Director of Raymond Limited said: “Raymond believes in nurturing and growing each of its businesses. I am happy to share that our Engineering business comprising of Tools & Hardware and Auto Components has demonstrated good performance and it is poised for future growth. We are consolidating the business to explore all options available to us for monetization, which will enable deleveraging leading to value creation.

“Additionally, our Realty business has showcased performance since its launch and in order to realize its full potential it will now be a wholly owned subsidiary of Raymond Limited. We continue to focus on our B2C business by bringing in operational efficiencies and synergies to strengthen our Lifestyle business.”