ITC Hotels Demerger

As a part of the demerger splitting ITC Hotels into an individual entity, ITC has allotted 125.11 Crores equity shares of ₹1 each to its shareholders, post a board meeting held on 11th January 2025. Consequently, ITC Hotels now ceases to be a subsidiary of the Company.

The long-awaited demerger of Kolkata-based diversified conglomerate ITC’s hotel business will come into effect today. The tobacco-to-hotel conglomerate has fixed January 6 as the record date for the spin off of its hotels business. According to the demerger scheme, ITC Hotels will now be a separately listed entity from its parent ITC Ltd.

itc hotels demerger

About ITC Limited

ITC was originally incorporated as the Imperial Tobacco Company of India Limited in 1910. Today, ITC is one of India’s leading private sector companies with businesses spanning:

– Fast Moving Consumer Goods
– Cigarettes
– Paperboards and Packaging
– Agri Business, and 
– Information Technology

The Company recorded a gross revenue of ₹69,446 crores and Net Profit of ₹20,422 crores, as of FY 2023-24. Headquartered in Kolkata, ITC boasts of a vibrant portfolio of 25+ world-class Indian brands including Aashirvaad, Sunfeast, Yippee!, Bingo!, Sunbean, Fiama, Engage, Vivel, Savlon, Classmate and more!

Hotel Brands under ITC- Over the years, ITC has introduced a diverse portfolio of hotel brands setting benchmarks in the hospitality industry. 

1. ITC Hotels – ITC Maurya (New Delhi), ITC Grand Chola (Chennai), ITC Gardenia (Bengaluru)
2. WelcomHotels – Welcomhotel Bengaluru, Welcomhotel Amritsar
3. Fortune Hotels – Fortune Select Exotica (Navi Mumbai), Fortune Park Panchwati (Kolkata)
4. WelcomHeritage Hotels – WelcomHeritage Shivavilas Palace (Karnataka), WelcomHeritage Mandir Palace (Jaisalmer)
5. Momentos by ITC Hotels – Momentos Udaipur (Upcoming), Momentos Goa
6. Storii by ITC Hotels – Storii Coorg, Storii Goa
 

Understanding the Demerger Process and Timeline

  • Shareholders will get one equity share of ITC Hotels for every 10 shares of ITC held. 
  • ITC will keep a 40% stake in the newly demerged entity. 
  • The remaining 60% will be held by existing shareholders proportionate to their stake in ITC, with post demerger equity capital of ₹208 crores.
  • ITC Hotels is expected to be listed on the stock exchange around mid-February, 2025. 

Why is ITC demerging its hotel business?

The ITC Hotels demerger will enable sharper focus and tailored hospitality strategies for the brand. 

  1. Mature Hotels Business Ready for Growth: ITC’s hotels segment has grown significantly and is now ready to thrive as an independent company. This move will allow it to grow faster while leveraging ITC’s brand and expertise.
  2. Focused Hotel Entity for Future Growth: Creating a standalone hotels company will allow sharper focus and strategies tailored to the hospitality market. This sets the stage for new opportunities and long-term value creation.
  3. Optimized Capital for Expansion: The new entity can access targeted investors and funding more easily. This alignment ensures growth strategies fit the hospitality sector’s needs.
  4. Enhanced Value for ITC Shareholders: ITC shareholders will get a direct stake in the new hotels entity. 
     

ITC Hotels Listing Date

ITCHL is expected to be listed in the second half of February 2025, upon submitting the relevant paperwork for the listing of its equity shares. 

The shares will be frozen until the stock exchanges issue listing and trading permits.

Earlier on 16th December 2025, ITC had announced that ITC Hotels’ shares will be listed within 60 days after receiving the NCLT ruling.

ITC Ltd’s Financial Overview

As on 3rd January 2025, ITC Ltd. has a market capitalization of approximately ₹6.3 Trillion. The company’s Price-to-Earnings (P/E) ratio stands at 29.48. Over the last 7 days, the stock has moved up by 2.2%. Revenue is up for the last 3 quarters from  ₹18.60K Crores to ₹21.35K Crores, with an average increase of 6.6% per quarter. Mutual Funds holdings for ITC Ltd have also increased from 11.92% to 12.75% during the Sep 2024 quarter.

FAQs

What’s the record day for ITC Hotels demerger?

The record date for the demerger of ITC Hotels is set for January 6. ITC shareholders whose names will appear in the company’s books as on January 6 record date, will get one share of ITC Hotels for every 10 ITC shares held.

ITC Hotels demerger ratio?

The demerger ratio of ITC Hotels is 1:10, which means shareholders will receive one share in the new hotel entity, ITC Hotels, for every 10 they currently hold in the parent company, ITC Ltd.

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