CHENNAI: Raymond Limited's market capitalisation declined by Rs 1,500 crore as the company’s share prices fell for the seventh consecutive session on Wednesday amid uncertainty over the family dispute between its managing director Gautam Singhania and wife Nawaz.
The company’s share prices fell 3.77% on Wednesday and settled at Rs 1,677. Share prices fell 12% from Rs 1,847 to Rs 1677 between November 13 and November 22. Nawaz reportedly demanded 75% of his estimated net worth of Rs 1.4 billion for their two daughters, sparking concerns among investors. She has also alleged that her husband assaulted her and her daughter.
Gautam Singhania is considering establishing a family trust to manage and transfer family assets, as per news reports. However, only he will serve as the trustee for the wealth, which is not acceptable for his wife. The couple separated earlier this month.
On Monday, ICICI Securities initiated a hold call for the share and a target price of Rs 1,860. It has cited rising input cost, challenging demand environment and likely increased competition from new players entering the category as the concerns.
Last four years have been a golden time-period for Raymond (share price up by 6x), driven by several structural changes in the organisation – rapid scale-up of the real estate business, sharp focus on cost optimisation, simplification of group structure through potential de-merger of the lifestyle business and doubling the size of engineering business as steps in the right direction, according to the brokerage.