According to a filing by the company, ITC will hold 40% in the hotel company while the rest 60% will be with shareholders of ITC on a proportionate basis.
ITC Hotels was set up as a separate company during the 1980s and later in August 2004, ITC Hotels was merged with the mother company ITC. At the company’s AGM in 2021, Puri first indicated a possible restructuring of the hotel business. Details of the proposed reorganisation, including the scheme of arrangement, shall be placed for approval of the board at its meeting to be convened on August 14, 2023.
The board has also approved incorporation of a wholly owned subsidiary of the company, to be named ITC Hotels.
The hotels division made a major turnaround in 2022-23. It had posted a segment revenue of Rs 2,585 crore in 2022-23 from Rs 1,285 crore in 2021-22, a growth of 101%. The profit of the segment was at Rs 542 crore in 2022-23, one of the highest in its history, from a loss of Rs 183 crore in the year-ago period. Now, the hotels division has over 120 hotels and 11,600 keys.
ITC said that the board of directors of ITC, at its meeting evaluated and discussed various alternative structures for the hotels business towards crafting the next horizon of growth as also enhancing value creation for all stakeholders.
At Rs 6. 1 lakh crore, ITC most valued FMCG company briefly
For a brief while during Monday’s session, ITC had become the most valued FMCG company in India, surpassing HUL. However, after the Kolkata-headquartered FMCG major announced demerger of its hotels business, the stock fell sharply to close almost 4% lower. Market players said it was ‘buy on rumour, sell on news’ strategy that brought ITC down after the demerger announcement. At close of Monday’s session, with a market capitalisation of Rs 6. 11 lakh crore HUL was the fifth most valued company in India, followed by ITC at Rs 6. 10 lakh crore, BSE data showed.