The branded fabric and fashion retailer Raymond Group aims to get rid of net debts in three years, although the initial sale of JK Files and Engineering (JKFEL) shares to this fiscal will begin.
“The company is focused on liquidity management through initiatives to reduce costs and optimize working capital with the stated goal of becoming a company without net debt in the next three years,” according to its annual report for the financial year 2021-22.
Raymond also expects JKFEL’s initial public offering (IPO) earnings, scheduled for fiscal year 23, to reduce its balance sheet indebtedness and help it get rid of net debt.
JKFEL, in which the group consolidates its tools, hardware and ancillary automotive businesses, has offered to launch an IPO, with Raymond participating as a selling shareholder.
The draft prospects for red herring or the original documents were submitted in December 2021 and received the approval of the market regulator on 23 February 2022, while the IPO was scheduled for March this year.
However, due to the instability of global stock markets caused by the protracted conflict between Russia and Ukraine, it was decided to wait for the right time for JKFEL’s IPO. The board expects to complete OFS in fiscal 2022-23, when stock market conditions for fundraising will be favorable, it said.
Raymond reduced its net debt to 1,088 rupees by the end of fiscal year 22, from 1,416 rupees in fiscal year 21 and 1,859 rupees in fiscal year 20. The Group’s net debt-to-equity ratio fell to 0.4 in fiscal year 22 from 0.8 for fiscal year 20.
For the company, the 22nd fiscal year ended on a high note, with the group recording the highest EBITDA to date of Rs 881 crore and a net profit of Rs 260 crore on a consolidated basis over the past 10 years.
“Our strategy to focus on the core and recalibrate key business indicators, such as revenue, costs and working capital, has reaped rich dividends for the Raymond Group. Maintaining our focus on optimizing costs and significantly reducing our operating costs by Rs 453 compared to pre-Covid levels of fiscal years 19-20 was crucial to our business, ”said Raymond Gautam Chairman and Managing Director Harry Singhania in your message to the shareholders.
Speaking about the new dimensions of retail, Singhania said the post-pandemic world had opened up new avenues for consumers to interact and shop.
“While physical retail will continue to thrive in India, the digital world and social trade are growing rapidly in India,” he added.
From the perspective, the company said in the annual report that it expects to have the momentum of profitable growth, with positive general consumer sentiment in the domestic market due to the summer wedding season and increased social gatherings. In the export market, B2B apparel and engineering businesses are expected to maintain a healthy flow of orders.
Consolidating the B2C business, including clothing at Raymond, will generate synergies in design and innovation, supply and operational efficiency, while consolidating the engineering business is expected to generate synergies in business development, raw material supply and logistics and overall administrative processes, he added. .