NCLT Mumbai Approves Raymond's Strategic Demerger Scheme

NCLT Mumbai Approves Raymond's Strategic Demerger Scheme

The National Company Law Tribunal (NCLT), Mumbai bench comprising Kishore Vemulapalli (Judicial Member) and Anu Jagmohan Singh (Technical Member), has approved a composite scheme of arrangement involving Raymond Limited (RL), Raymond Lifestyle (RLL), and Ray Global Consumer Trading (RG).

Raymond Limited (RL) explained that the rationale behind the scheme was to cater to the distinct operational requirements and strategic focus of its various business verticals. RL currently operates both lifestyle and non-lifestyle segments, each with unique capital requirements, operational dynamics, risk profiles, and growth strategies. By demerging these segments into separate entities—Raymond Lifestyle Limited (RLL) for lifestyle and integrating Ray Global Consumer Trading (RG) into RLL—Raymond aimed to optimize management focus and enhance operational efficiencies tailored to the specific demands of each business.

The primary objective of the demerger was to establish two robust and distinct listed entities. Post-demerger, RLL will assume zero net debt across both its lifestyle and non-lifestyle operations, positioning itself for sustained growth and enhanced market competitiveness.

Under the scheme, equity shares of RLL will be listed on both the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). This structure offers existing RL shareholders the opportunity to manage investments across two distinct business profiles with differentiated market dynamics.

In adherence to regulatory requirements, the scheme detailed specific undertakings related to accounting standards (IND-AS), the appointed date (1 April 2023), the effective date, and other statutory obligations under the Companies Act, 2013. The companies committed to ensuring seamless compliance with income tax, GST regulations, and directives from sectoral regulators. The Official Liquidator's report confirmed that the demerger scheme was in the public interest and did not prejudice any stakeholders.

Following NCLT's approval, Raymond Consumer Care Limited has formally rebranded itself as Raymond Lifestyle Limited as part of the restructuring process.

The NCLT order stated: 

“From the material on record, the scheme appears to be fair and reasonable, is not in violation of any provisions of law, and is not contrary to public policy.”

Having completed all statutory compliances, including the filing of necessary documents with the Registrar of Companies and Superintendent of Stamps, the NCLT concluded the demerger process.