Raymond Shares Plunge 66%, But It's Not What You Think: Demerger Explained

Raymond Shares Tumble 66% — But Wait, Is This Actually Good News?

If you checked your stock portfolio today and saw Raymond Ltd. in freefall, you're not alone. The iconic Indian textile and apparel brand saw its shares nosedive by a jaw-dropping 66% in a single day. But before you hit that panic-sell button, you might want to take a closer look. What seems like a financial disaster is actually just corporate restructuring in action.

For the uninitiated, Raymond isn't just another company—it's practically a household name in India, known for its quality fabrics and the tagline "The Complete Man." Which makes today's price movement all the more attention-grabbing.

What's Really Going On Here?

Remember when your parents explained that dividing your pizza doesn't mean you have less pizza? That's essentially what's happening with Raymond. The company is splitting itself up, with its real estate arm—Raymond Realty—becoming a separate entity altogether. This follows a similar move last September when Raymond spun off its lifestyle business.

Here's the simple math: If you owned shares in Raymond Ltd., you'll now automatically receive an equal number of shares in Raymond Realty. Your pizza isn't smaller—it's just on two plates now.

• Not a crash, but a split: The 66% drop in Raymond's share price simply reflects that the company is now valued without its lucrative real estate business. Your total investment value remains unchanged; it's just distributed differently.
• Your portfolio's actual value: If you're panicking looking at your investment app, take a breath. Some trading platforms might take time to show your new Raymond Realty shares, making it temporarily appear as though you've lost money.
• Raymond Realty's promising future: The real estate arm isn't exactly starting from scratch. They've already secured a major residential development deal in Mumbai expected to bring in ₹5,000 crore. The new company will likely hit the NSE and BSE exchanges by mid-2025.

May 14th marked the ex-date for this demerger—the day when this significant price adjustment kicked in. If your trading platform shows conflicting numbers, give it a day or two to catch up with the corporate action.

Should Investors Be Worried or Excited?

I spoke with several market analysts who view this as a potentially positive move for long-term investors. "Companies often unlock hidden value when they separate distinct business units," explained one financial advisor who preferred to remain unnamed. "Look at what happened when Reliance spun off Jio—both entities thrived with their focused approaches."

This demerger is part of Raymond Group's broader strategy to let each business shine on its own merits. The textile business won't be weighed down by real estate concerns, and the property development arm can pursue aggressive growth without affecting the core brand.

For investors, this presents an interesting opportunity. Do you hold both companies? Sell one and double down on the other? The choice depends on your investment goals, but at least now you have options that weren't available before.

What to Watch For: The Road Ahead

The true test of whether this demerger was smart business will unfold over the coming months. Keep an eye on how Raymond Ltd. refocuses its textile and apparel operations now that it's streamlined. Meanwhile, Raymond Realty's listing next year will be a crucial moment—will the market value it higher as a standalone entity?

If you're holding Raymond shares, today's price drop might have given you a momentary heart attack. But remember, corporate restructuring often looks dramatic on paper while actually setting the stage for future growth. Sometimes, what looks like losing value is really just redistributing it—potentially for the better.

The Raymond story is a classic reminder for all investors: always look beyond the headlines. A 66% drop sounds catastrophic until you understand it's just your investment taking on a new form. As for whether to hold, buy, or sell? That's a conversation best had with your financial advisor, who can consider your complete investment picture.