The legacy business started operations with a small woollen mill in Thane, on the outskirts of Mumbai, in 1925. Singhania is separating it from Raymond, while keeping the four-year-old real estate venture within the flagship. He is restructuring his empire to focus on the core lifestyle, real estate, and engineering businesses even as he exits from the fast-moving consumer goods segment.
He will transfer the fabric &apparel business to the closely held RCC, which will be listed, with Raymond shareholders getting four shares of RCC for every five shares held in the flagship. The fabric & apparel business had an operating profit of Rs 416 crore on a revenue of Rs 3,679 crore in fiscal 2022.
After the transfer, Raymond will be left with real estate and investments in the denim and engineering businesses (JK Files and Engineering had filed draft IPO documents with Sebi but had put its listing plans on hold). The real estate segment made an operating profit of Rs 143 crore in fiscal 2022.
Raymond will also become net debt-free after the restructuring. This is because RCC will not only take over the fabric & apparel unit’s assets but also its liabilities of Rs 932 crore. Singhania plans to infuse the proceeds from the sale of the FMCG business into RCC, in which he owns 49. 6%. The balance 52. 4% is held by Raymond (47. 6%) and others (2. 6%). The fund infusion will enable RCC to be net debt-free.
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