NEW DELHI: ADDRESSING shareholders’ concerns, textile major Raymond said on Monday that its demerged core lifestyle business will own the Raymond brand for the textile, apparel and retail categories. With this arrangement, the Raymond Lifestyle business will not be required to pay a royalty to the parent Raymond Ltd.
Earlier, investors had expressed concerns on payment of royalty after the group announced demerger of the lifestyle business into a new unit. Raymond Ltd will continue to own the brand in other businesses, including real estate.
“Raymond’s brand ownership for all the other businesses (except for Raymond Lifestyle Businesses) will remain with Raymond Ltd. I am happy to announce the management’s decision of moving brand ownership with usage categories in respective companies... there will be no inter-company brand licensing rights or royalty contracts,” Raymond Ltd Chairman and Managing Director Gautam Hari Singhania said.
Every shareholder of Raymond Ltd. will be issued shares of the new company in the ratio of 1:1. The move will create a clear demarcation of lifestyle and other businesses, leading to the simplification of the group structure, the firm said.
The new company will have the businesses of branded textiles, branded apparel and garmenting, while the existing company will retain real estate projects, Thane land bank, B2B shirting business, engineering businesses of auto components and tools and hardware, denim and FMCG businesses.
The proposed scheme is subject to various regulatory and statutory approvals.