BAT Plans Step-By-Step Exit From ITC Hotels Post Demerger

Following the formal demerger of ITC Hotels from its parent company ITC Limited, British American Tobacco (BAT) is preparing to divest its 14.55% stake in the hospitality business. This move, aligned with BAT's strategic focus on deleveraging its balance sheet, follows an earlier sale of its equity in ITC Limited.

Background of ITC Hotels Demerger

The demerger of ITC Hotels officially took effect on January 1, 2025, with January 6 designated as the record date. ITC Limited retained 40% ownership in the newly formed entity, while the remaining stake was distributed among shareholders, including BAT.

This structuring laid the groundwork for BAT—one of ITC's major long-term stakeholders—to reassess its position in the hotel business, which no longer falls within its core area of focus.

BAT’s Stake in ITC Hotels and Strategic Plans

BAT holds a 14.55% stake in ITC Hotels, according to a report by ET NOW, BAT plans to exit via a phased sale. Report revealed that the offloading could begin shortly, though the pace and scale of liquidation are yet to be announced.

The planned divestment is not without precedent. In May 2025, BAT offloaded a 2.5% stake in ITC Limited worth approximately $1.4 billion by selling shares at ₹413 apiece.

The funds raised from this potential sale of shares will be used primarily to deleverage BAT’s balance sheet, which has been an ongoing focus for the group's financial strategy.

ITC Hotels Q4FY25 Results

For Q4 FY25, ITC Hotels reported a consolidated net profit of ₹257.85 crore, reflecting a 19% year-on-year increase. Revenue from operations rose to ₹1,060.62 crore, up from ₹1,015.4 crore in the same quarter last year.

Over the full financial year FY25, the company posted a consolidated net profit of ₹637.64 crore and revenue amounting to ₹3,559.81 crore, confirming steady growth in its post-demerger standalone performance.

Read More: Lemon Tree Hotels Signs Deal for New Property in Itanagar, Arunachal Pradesh!

BAT’s Long-Term Strategy

Tadeu Marroco, CEO of BAT, had previously clarified the company's strategic disinterest in holding a long-term stake in ITC Hotels. This further supports expectations of a full, though gradual, exit from the hospitality business.

As BAT continues to focus on its core business in tobacco and nicotine, non-core assets like ITC Hotels are being monetised to enhance financial resilience.

ITC Hotel Share Price Performance 

On June 17, 2025, ITC HOTELS share price opened at ₹215 on NSE, above the previous close of ₹214.47. During the day, it surged to ₹217.71 and dipped to ₹214.51. The stock is trading at ₹216.97 as of 9:51 AM. The stock registered a moderate gain of 1.17%.

Conclusion

British American Tobacco’s intended phased sale of its stake in ITC Hotels underscores a strategic move to realign its investment portfolio post-demerger. With ITC Hotels showing admirable financial performance in its first quarter as an independent entity, investor interest remains sharp. The unfolding stake sale is poised to influence market sentiment and stakeholder positioning in the near term.

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