Raymond eyes ₹25,000 cr revenue from real estate business

June 6, 2024

Gautam Hari Singhania-led Raymond has the potential to generate a revenue of ₹25,000 crore through development of its land bank in Thane.

The Group has about 100 acres of land in Thane with 11.4 million sq ft RERA approved carpet area, of which about 40 acres are currently under development.

There are five ongoing projects worth ₹9,000 crore on its Thane land, with additional potential to generate over ₹16,000 crore, making a total potential revenue of over ₹25,000 crore from this land bank, said the company in its latest annual report.

Leveraging an asset-light model, Raymond launched its first JDA (joint development agreement) project in Bandra, Mumbai, in February and sold over 60 per cent of the project in 40 days.

Additionally, it has signed two new JDAs in Mahim and Sion in Mumbai, taking the combined revenue potential to ₹5,000 crore from the three JDA projects in the Mumbai Metropolitan Region. The real estate vertical secured a total booking value of ₹2,249 crore in FY24.

Demerger of business

The Raymond Group became net debt-free last year after the sale of its FMCG business, two years ahead of the stated deadline. The company will be demerging the Lifestyle business from Raymond to unlock value for shareholders. Post this demerger, there will be two listed companies: Raymond Lifestyle and Raymond, which will own the realty and engineering business.

The Group has identified the core three businesses of Lifestyle, Real Estate, and Engineering as future growth pillars and is on the cusp of a new beginning, said Singhania.

After a gap of nearly 20 years, Raymond bought the business of Maini Precision Products by acquiring a majority stake of 59 per cent for ₹682 crore.

MPPL is a prominent manufacturer of auto component parts as well as in the sunrise sectors of aerospace, defence, and EV components.

With the acquisition of MPPL, the engineering business is now consolidated, with two separate subsidiaries focusing on aerospace and defence, while the other will cater to auto components, EV, and engineering consumables, he said.

In FY24, the garmenting segment recorded a revenue of ₹ 1,139 crore, driven by demand from existing and newly acquired global customers, with an EBITDA margin of 9.6 per cent. The real estate business registered a 43 per cent rise in sales to ₹1,593 crore (₹1,115 crore).

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