Raymond Split Ratio and Confusions solution after demeger

 

There is lot of confusion arises when Raymond Stock is listed after demerger, we will try to clarify the same through this article:-

Raymond stock will be split into two entities:-

1.       Raymond’s Limited

2.       Raymond’s Lifestyle

For every five share of Raymond’s limited four equity shares of Raymond lifestyle will be given.

Further shareholders of Ray Global Consumer trading will received two equity share of Raymond lifestyle will be given.

Ex-date for eligibility for getting Raymond Lifestyle after holding Raymond’s shares is 11 July 2024.

When stock listed after split on 11^th July 2024 lot of confusion arises in Investors minds:-

1.       At what price the stock get listed at BSE and NSE?

2.       What are the circuit filters?

3.       Why there is mismatch from last closing price and considering split ratio?

Now last closing price of Raymond stock was Rs.3156.10 per share on NSE and according to split ration of last traded price of Rs.3156.10 per share the price of last close should be Rs.1753.33 per share and Raymond’s lifestyle which will list later on would have value of Rs.1402.67 per share.

Now when stock market opens today Raymond stock wasn’t trading and created confusion among investors that why it is not trading. But after stock demerger this stock get listed at 10:00 AM per SEBI rules as this is new entity and has to follow IPO listing rules.

Now after listing Circuit filters are showing upper circuit price of Rs.2001.30 per share and lower circuit of Rs. 1810.70 per share.

Now Circuit filter is of only 5% in this stock and according to lower circuit price of Rs.1810.70 if we multiply by 5% we will get the listing price of that stock. Now when we multiply Rs.1810.70 by 1.05 we get listing value of share as Rs.1900.5 per share. This means that Raymond’s Limited and Raymond’s Lifestyle limited has combined value of Rs.3420.9 per share.

This is clearly win win situation for investors as now stock closed at upper circuit of Rs.2001.30 per share implies value of Raymond’s combined entity as Rs.3591.94 per share i.e. upside of more than 13% in that stock from pervious close.