The Raymond share price witnessed a sharp and eye-catching fall of nearly 66%, leaving investors confused and concerned. At first glance, such a massive drop looks alarming, but the real reason behind this fall lies in the Raymond Realty demerger, not in the company’s operational failure.
Let’s break down what actually happened, why the stock price crashed on paper, and what it truly means for shareholders.
What Triggered the 66% Fall in Raymond Share?
The primary reason behind the steep fall in Raymond’s share price was the demerger of Raymond Realty from Raymond Ltd. This was a corporate restructuring move, not a sell-off driven by poor performance.
When a company undergoes a demerger, the value of the separated business is adjusted from the parent company’s stock price. As a result, the stock price appears to fall sharply, even though shareholder value remains largely intact.
Understanding the Raymond Realty Demerger
Raymond Ltd decided to separate its real estate business into a standalone entity called Raymond Realty. The goal behind this move was to:
- Unlock hidden value in the real estate segment
- Allow focused growth for both businesses
- Improve transparency for investors
- Enable independent valuation of lifestyle and realty businesses
After the demerger, shareholders of Raymond Ltd became eligible to receive shares of Raymond Realty separately, based on the approved demerger ratio.
Is the 66% Fall a Real Loss for Investors?
This is the most important question—and the answer is no, not exactly.
The sharp fall reflects a price adjustment, not a destruction of wealth. The value that moved out of Raymond Ltd is now represented by Raymond Realty shares.
In simple terms:
- Earlier: One company = combined value
- Now: Two companies = value split
So while Raymond Ltd’s stock price dropped, investors are compensated through ownership in the newly formed Raymond Realty entity.
Why Such a Big Percentage Drop?
The fall looks dramatic because:
- Raymond Realty held a significant portion of Raymond Ltd’s overall valuation
- The stock price was adjusted in a single trading session
- Many retail investors misunderstood the adjustment and panic selling added pressure
Percentage-wise, the drop appears huge, but fundamentally it reflects the separation of assets, not business erosion.
Market Reaction and Investor Sentiment
Initially, markets often react negatively to complex corporate actions due to confusion and lack of clarity. The Raymond share fall triggered fear among short-term investors who were unaware of how demergers work.
However, long-term investors generally view demergers positively because:
- Each business gets focused management
- Growth potential becomes clearer
- Valuation improves over time
What Happens to Raymond Ltd After Demerger?
Post demerger, Raymond Ltd will focus primarily on:
- Textiles
- Branded apparel
- Engineering and lifestyle segments
This allows the core business to operate without being overshadowed by the capital-heavy real estate division.
At the same time, Raymond Realty can independently pursue:
- Residential projects
- Premium housing development
- Faster execution and monetization
Should Investors Be Worried?
For long-term investors, the Raymond share fall is not necessarily a red flag. It is crucial to look beyond daily price movements and understand corporate restructuring.
Key things investors should focus on:
- Future performance of Raymond Ltd
- Listing and valuation of Raymond Realty
- Overall portfolio value after demerger
- Management guidance and execution
Short-term volatility is common during such events, but clarity improves with time.
Final Thoughts
The 66% fall in Raymond share price may look shocking, but it is largely a technical adjustment due to the Raymond Realty demerger. The company has not lost two-thirds of its business overnight.
For informed investors, this demerger could actually turn out to be a value-unlocking move in the long run. As always, understanding the “why” behind stock price movements is far more important than reacting to the numbers alone.