ITC Approves Share Acquisition in Oberoi and Leela Amid Hotel Business Demerger

ITC Ltd., one of India’s biggest conglomerates, is making an important change as it prepares to separate its hotel business into ITC Hotels Ltd. To strengthen its position, ITC is increasing its stake in luxury hotel chains Oberoi and Leela by buying more shares from its subsidiary, Russell Credit Ltd. This decision boosts ITC’s control over these well-known brands at a time when it’s shifting focus to give its hospitality division more independence.

What’s in the Deal?

As per ITC Ltd’s filing, the board approved the acquisition of 1.52 crore equity shares of EIH Ltd. (Oberoi & Trident brands) and 34.60 lakh equity shares of HLV Ltd. (Leela brand) from RCL at book value. Post-acquisition, ITC’s total shareholding will rise to 16.13% in EIH and 8.11% in HLV, compared to its current holdings of 13.69% in EIH and 7.58% in HLV. RCL, which holds 2.44% and 0.53% stakes in EIH and HLV, respectively, will transfer these shares, consolidating ITC’s presence in these leading hospitality brands.

The Bigger Picture: Demerger Mode

ITC’s demerger of its hotel business, approved by nearly 99.6% of shareholders back in June, will see its hospitality assets—including over 140 luxury properties across brands like ITC Hotels, Welcomhotel, and Fortune—go to ITC Hotels Ltd. This shift will help unlock more value and create a focused hospitality business.

ITC’s Financials

In Q2FY25, ITC reported a 3% increase in net profit to Rs.5,078.3 crore, with revenue from operations up 17% to Rs.19,327.8 crore. While FMCG and Agri-Business segments contributed majorly, the Hotels segment showed a 17% rise in revenue, driven by strong performances in food & beverage and weddings.

ITC Ltd. shares are up by 3.88% today, currently trading at Rs.490.00. The stock has risen 4.69% year-to-date (YTD) and has shown a growth of 13.27% over the past year.

Conclusion: In a nutshell, by consolidating its stake in Oberoi and Leela, ITC is not just strengthening its hospitality portfolio but positioning itself to grow in India’s luxury hotel business. The new ITC Hotels Ltd. promises a fresh chapter—one that’s all about focus, growth, and unlocking potential.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.