All you need to know about ITC Hotels demerger and special trading session
This strategic shift positions ITC Hotels as an independent powerhouse in the hospitality sector, ready to accelerate growth and capitalise on emerging opportunities.
In a transformative move that marks a new chapter in its corporate journey, ITC Ltd. has officially demerged its hotel business into a standalone entity, ITC Hotels Ltd., effective January 1, 2025.
The demerger will unlock value for shareholders, offering direct access to ITC’s thriving hospitality business, while enabling the parent company to sharpen its focus on its high-margin core businesses. This strategic shift positions ITC Hotels as an independent powerhouse in the hospitality sector, ready to accelerate growth and capitalize on emerging opportunities.
ITC Hotels Demerger: Key Developments and Adjusted Share Price
On January 6, 2025, ITC Ltd. held a pre-open special trading session to determine the adjusted price of its shares post-demerger. The session, which ran from 9:00 AM to 9:45 AM, established ITC’s discovered price at Rs 455.60 per share, down from its closing price of Rs 482 on January 3. This adjustment reflects the carve-out of ITC Hotels from the parent entity.
However, the exact trading price of ITC Hotels’ shares will only be unveiled in February 2025, once the newly demerged entity is officially listed. Analysts project ITC Hotels’ stock to debut within the range of Rs 150-Rs 200 per share, creating anticipation among investors.
Demerger Structure and Shareholder Benefits
Under the demerger scheme, ITC shareholders recorded as of January 6, 2025, will receive one equity share of ITC Hotels for every 10 shares held in ITC. Post-demerger, ITC Hotels’ ownership structure will be split as follows:
- 60 per cent of ITC Hotels’ equity will be directly held by ITC shareholders.
- The remaining 40 per cent stake will be retained by ITC Ltd.
This structure ensures ITC shareholders retain 100 per cent control of ITC Hotels, with the benefits of direct and indirect ownership.
Financial Foundation and Strategic Direction
The newly formed ITC Hotels Ltd. begins its journey with a "zero-debt balance sheet" and a robust cash reserve of Rs 1,500 crore, transferred by ITC Ltd, to support growth and contingency planning. With a portfolio of over 140 hotels spanning 90 destinations and six distinct brands, ITC Hotels is poised to leverage its strong market presence for organic and inorganic growth opportunities.
Trademark Agreement and Subsidiary Transfer
ITC Hotels will continue to use ITC’s prestigious trademarks, including iconic brands such as Bukhara, Dum Pukht, and Dakshin, under a licensing agreement. Additionally, investments in associated hospitality ventures - including Bay Islands Hotels, Fortune Park Hotels, and Srinivasa Resorts - have been transferred to ITC Hotels as part of the demerger scheme.
Path to Listing and Future Prospects
The National Company Law Tribunal (NCLT), Kolkata Bench, approved the demerger on December 16, 2024. ITC Hotels is expected to list its shares on the stock exchanges within 60 days of receiving regulatory approvals.
With a strong foundation, a clear growth strategy, and a debt-free status, ITC Hotels is well-positioned to enhance its competitive edge in the hospitality sector. The demerger not only unlocks value for shareholders but also paves the way for ITC Hotels to capitalize on emerging trends and expand its footprint both domestically and internationally.
Conclusion
The demerger of ITC Hotels marks a pivotal moment for ITC Ltd and its shareholders. As the new entity embarks on its independent journey, it stands ready to build on its legacy, drive innovation, and seize growth opportunities in India’s evolving hospitality landscape.
For investors, this transformation represents a compelling opportunity to participate in the growth story of one of India’s leading hotel chains.
Disclaimer: The article is for informational purposes only and not investment advice.