Gautam Singhania-controlled Raymond group is expecting to generate a topline of around ₹4,000 crore annually in its realty business in the next 3-4 years and the revenue from its engineering business to double in 4-5 years as it restructures its operations into pure-play businesses with separate revenue streams.

On Thursday, the real estate business under Raymond Ltd was demerged into Raymond Realty, which will be listed on the exchanges once regulatory approvals are obtained. Raymond Ltd will be left with the engineering business, which has the two segments of auto components business and aerospace and defense business.

The restructuring is being done to “simplify group structure and to create net debt-free pure businesses, offering investors the opportunity to invest based on their investment philosophy,” said Raymond director SL Pokharna in an analyst call to discuss the demerger. “The group has reached a stage where once the businesses reach a certain scale and maturity, we will create pure play businesses to unlock value.”

When asked whether in the future the engineering business, housed under Raymond Ltd, will be split further, Pokharna said, “we want to make sure when the businesses get mature, we have a clear timeline, we will take necessary steps to unlock value,” but refused to be drawn into anything specific.

The group has already demerged its lifestyle business last year and it is expected to be listed on the bourses sometime toward the end of August.

Real Estate

The group owns around 100-acres of land in Thane with a revenue potential of ₹25,000 crore. Of this, around 40 acres is being developed with a carpet area of 4 million sq ft (msf) and revenue potential of ₹9,000 crore. It has also signed four joint development agreements for 2 msf that gives it a revenue potential of ₹7,000 crore.

The entire revenue potential of ₹32,000 crore is expected to be realized over 7-8 years, Pokharna said.

Over 65 per cent of the home inventory in Thane has already been sold. Pokharna said the company was inundated with joint development proposals and it had a robust pipeline ahead.

The real estate business had revenue of ₹1,600 crore in FY24, and an EBITDA of ₹370 crore while it clocked bookings of ₹2,250 crore. The business has cash of ₹500 crore on its books that would be used in construction.

Engineering division

The engineering business under Raymond Ltd reported a revenue of ₹1,800 crore in FY24 and EBITDA of ₹270 crore.

Pokharna said the foray into aerospace, defence and electric vehicles would enable it to grow at a faster pace. These were phenomenal growth areas and “in the next 4-5 years we should be able to double from here,” he added.

Margins in the aerospace and defence business were higher than that in auto components, he said. “We are confident that the pace of growth will be fast.”

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