JK Files IPO when market conditions stabilise- Raymond Group CFO

JK Files IPO when market conditions stabilise: Raymond Group CFO

Diversified group Raymond will take a call on when to go ahead with the initial public offering of its group firm, JK Files and Engineering (JKFEL), once the turmoil in the global markets settles and inflation back home cools down.

Speaking to FE, Amit Agarwal, Group CFO, Raymond, said the company is in no hurry to go ahead with the IPO. The Securities and Exchange Board of India (Sebi) approved the proposed IPO in February and the company has time to decide till February next year, he said.

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Agarwal said the listing process for the group’s realty arm, Ten X Realty, would be initiated once the same is done for JKFEL. However, Raymond’s board has approved a resolution to infuse funds in the form of equity/ preference shares/ debentures/ inter-corporate deposit/ loan (redeemable/ non-redeemable/ convertible/ optionally convertible/ non convertible) up to `150 crore in more than one tranche.

Raymond Group operates in segments such as branded textile, branded apparel, retail, garmenting, engineering, real estate, and FMCG.

The proceeds of the IPO will be used to deleverage Raymond’s balance sheet and not for growth of business or day-to-day operations. According to Agarwal, the company is on track to become debt-free by 2025 as not only has profitability increased, but efficiency on the cost-control side has also improved.

As of March 2022, Raymond’s net debt stood at Rs 1,088 crore, compared to Rs 1,416 crore in FY21 and Rs 1,859 crore in FY20. Agarwal said as of June 2022, the debt has again increased to Rs 1,400 crore as the company required working capital to build inventory for the festive season, which would boost overall sales, he said.

Raymond posted a profit of Rs 82 crore in the April-June quarter of the current fiscal compared to a loss of Rs 157 crore in the same period last year. Revenues doubled from Rs 800 crore to almost Rs 1,700 crore during the same period. “We are expecting FY23 to be a record year in terms of revenue and profitability in the past 10 years for the company,” Agarwal said.