Raymond Realty's debut sparks 15% rally in parent Raymond, 16% in lifestyle arm
Shares of Raymond and its lifestyle arm rallied sharply on Tuesday ahead of the listing of Raymond Realty on Wednesday, following a recent demerger. Strong investor interest and high trading volumes signalled optimism around the real estate business. Brokerages expect value unlocking, citing strong growth potential and favourable valuation compared to listed peers.
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Shares of Raymond Limited rallied 15% to hit an intraday high of Rs 718.05 on the BSE on Tuesday, a day ahead of the listing of its realty arm following a demerger. Investors made a beeline for the company's shares with volumes jumping nearly 34 times. Raymond Realty is a real estate subsidiary demerged from Raymond following the completion of the demerger process, which took effect earlier in May, with shareholders of Raymond receiving one share of Raymond Realty for every one share held.Raymond Realty's demerger also follows the listing of its lifestyle business in September 2024. Shares of Raymond Lifestyle also traded with gains and were up 16% in the intraday trade, hitting the day's high of Rs 1413.95. The spurt in volumes was over 13 times. The companyDomestic brokerage firm SBI Securities expects Raymond Realty to list in the range of Rs 897 to Rs 1,430, based on estimated FY26 EV/EBITDA multiples of 11–15x and EBITDA growth expectations of 0–20% over FY25. In a base case scenario, assuming 10% EBITDA growth in FY26 and an EV/EBITDA multiple of 13x (which factors in a 23.5% discount to peers), the brokerage pegs the fair value at Rs 1,148.SBI Securities notes that Raymond Realty's valuation is benchmarked against a peer average EV/EBITDA multiple of 17x (including listed players like Arkade Developers, Keystone Realtors, and Sunteck Realty).Post listing, analysts expect the Street to monitor key performance indicators (KPIs) such as pre-sales, embedded EBITDA margins, debt levels, and cash flows to evaluate the company's ongoing financial health.Meanwhile, another brokerage firm, Ventura Securities, has anticipated a FY28 DCF-based price target of Rs 1,383 per share for the stock.Also read: Reliance Power extends winning streak, up 13% in 5 sessions. What's fueling the surge? "Given the substantial opportunities and growth prospects, the demerger of RRL will unlock significant value for shareholders by allowing the company to pursue sustainable growth with a focused, pure-play real estate strategy. RRL is set to be listed in July 2025, and our FY28 DCF-based price target is Rs 1,383 per share,' Ventura said in its note.
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