The share price of Raymond tumbled over 64% in early trade on Wednesday. From a 52-week high of Rs 2,380, the stock plunged to a 52-week low of Rs 523.10 today suddenly. Are you also puzzled why? Don’t worry, unlike most stock market fall, this one was not due to any bad news, poor earnings, or investor panic. This is a technical adjustment as the demerger of the realty business comes into effect.
So, what really happened? Let’s take a look at what triggered the fall in Raymond’s share price –
Raymond shares see technical adjustment
The sudden fall in Raymond’s share price is linked to its recent demerger of the real estate business, Raymond Realty.
Today, May 14 marked the ex-date for the demerger. This is the day when the company’s shares stop factoring in the value of the real estate arm.
Because the value of Raymond Realty is no longer included in the parent company’s stock, the share price adjusted accordingly. This is a standard market practice when companies spin off a business unit.
Raymond demerger: What is it all about?
In July 2024, Raymond announced its decision to split off its real estate vertical into a separate listed entity – Raymond Realty. The plan got the green light from the National Company Law Tribunal in March this year and officially took effect on May 1.
Under the demerger plan, shareholders will receive 1 share of Raymond Realty for every 1 share of Raymond they own. The record date to determine eligible shareholders was May 14, and the stock turned ex-date on the same day, the point at which the adjustment in stock price took place.
What does this mean for Raymond shareholders?
In a simple layman put, while the value of Raymond shares has dropped, shareholders have not lost that value. It just moved to another basket.
If you held shares in Raymond before the record date (May 14), you are now eligible to receive shares of Raymond Realty once it gets listed. The realty stock is expected to hit the exchanges in the September 2025 quarter.
Raymond share price performance
After the 64% drop, Raymond’s share price touched a new 52-week low of Rs 523.10.