Amid reports of chairman Gautam Hari Singhania's estranged wife, Nawaz Gautam Singhania, demanding 75% of his $1.4 billion fortune as part of a settlement, Raymond's shares extended losses for the seventh consecutive session on Wednesday, dropping by 4%.
Since November 13, the stock has witnessed a 12% decrease, coinciding with Singhania's announcement of separation from Nawaz Singhania, his wife of 32 years and a board member at Raymond. This decline led to a loss exceeding $180 million in market value, with shares falling by 4.4% on Wednesday, marking the most significant drop since October 25.
Photo: Economics Times
Experiencing an intraday decline of 4.3%, the stock concluded 4% lower at 1671.05. Across the seven sessions from November 13-22, it recorded a decline of approximately 12.5%, leading to an almost ₹1,500 crore loss in market cap. The current market cap now stands at ₹11,124.80 crore.
Despite achieving a 13% gain in 2023 YTD and a notable 36% increase in the last year, the stock has demonstrated a remarkable rally, soaring almost 6x in the past four years.
Analysts have raised concerns about the corporate governance implications stemming from Nawaz's position as a board member, with Varun Singh, an analyst at ICICI Securities Ltd., expressing apprehensions regarding the uncertain impact on the company.
The stock is being influenced by the uncertainty surrounding the separation. Varun Singh began covering the stock with a hold recommendation on November 20. As of now, Bloomberg's compiled data shows that the company has seven buy ratings and no sell ratings.
The Tumultuous Separation of Modi-Singhania
Billionaire Gautam Singhania, on November 13, announced his separation from Nawaz, stating their decision to pursue different paths. He married Nawaz Modi in 1999 after eight years of courtship.
Photo: X
Nawaz Modi Singhania, in an exclusive interview, has alleged physical abuse against her and her minor daughter by Gautam Singhania. In response, Singhania has declined to comment, emphasizing the need to maintain his family's dignity and privacy.
As part of the family settlement post-divorce, Nawaz has reportedly demanded 75% of Singhania's alleged $1.4 billion net worth for herself and their two daughters. Singhania suggested creating a family trust, transferring assets to it, with him as the sole managing trustee. However, the terms are reportedly unacceptable to Nawaz.
In Gautam's proposed family trust, he would act as the sole managing trustee, allowing family members to inherit assets after his demise. However, Nawaz reportedly finds this arrangement unacceptable, leading to ongoing negotiations with legal advisors involved from both parties.
Akshay Chudasama, Managing Partner at Shardul Amarchand Mangaldas & Co., is attempting to mediate between the couple for a possible reconciliation or mutually agreeable resolution.
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