Raymod has struck a deal with Godrej Consumer Products on Thursday selling its brands like KS, Kamasutra and Park Avenue deodorants in a Rs 2825-crore deal. “I have managed to kill three birds with one stone,” said Gautam Singhania after the deal.
The deal transfers brands such as KS, Kamasutra, and Park Avenue deodorants from GCPL. Singhania said, “Three birds were killed in this deal. First we sold the business and the proceeds will make the lifestyle company debt-free. Secondly we are strengthening the group with the demerger of the lifestyle division and the subsequent listing.”
He said: “We’re in the business to make money. This was an excellent opportunity for Godrej as well as us. We have wanted to sell the business for some time, but it was only when it was necessary that we did so.”
Singhania explained that the deal created value for the company’s shareholders and that was his priority.
This is a good way to show that we don’t have an emotional attachment to our business, but we do. “But for the right price, everything is for sale”, he continued.
Aurangabad, Maharashtra, is home to the largest condom production plant. The group sold its business to GCPL. Amit Agarwal, Group CFO, said that the group will supply condoms for Kamasutra to GCPL and some other clients internationally.
Park Avenue will now have two brands, one for men’s grooming and another for suiting/shirting. Both brands will be part of the same group. The shirting vertical of Raymond has also been separated and will now be listed on the bourses as a separate company, RCCL. The brand Park Avenue is a win-win for both parties, GCPL as well as us. Nothing changes for consumers. Singhania said that it was a win-win situation for everyone.
Raymond Limited will now focus solely on real estate. The company is confident about its business because the initial phase of construction has been met with a positive reception near Mumbai’s Thane. This is also Raymond’s second home. Real estate will be a serious business for us.
Singhania said that the initial phases were a great success. More are on their way, and then joint development is what will follow.
The Stocks of Raymond Industries were down more than 7% on Friday after the deal was announced.