ITC Ltd, a diversified conglomerate’s, demerger of ITC Hotels takes effect today. As per the demerger plan, the record date for determining the eligible ITC shareholders for the allotment of ITC Hotels equity shares due to the demerger is January 6. ITC Hotels’ shares will be listed within 60 days from the receipt of the NCLT Order, which was issued on December 16, 2024.
On January 01, 2025, ITC’s share price traded 0.19% higher at ₹484.55 at 11:00 AM on the NSE. The stock opened at ₹486, higher than ₹483.65 at its previous close.
The demerger announced earlier, sees the transfer of the company’s shareholdings in several subsidiaries and associates to ITC Hotels Limited, including 100% ownership in Fortune Park Hotels and significant stakes in other entities like Bay Islands Hotels, WelcomHotels (Lanka), and more.
As part of the arrangement, current ITC shareholders will fully own ITC Hotels, with around 60% of the shares directly owned and the remaining 40% indirectly through ITC. The demerger will transfer all hotel-related properties, assets, employees, and contracts to ITC Hotels.
Key intellectual properties, including famous trademarks like Bukhara, Dum Pukht, and Dakshin, will also be licensed to ITC Hotels. Furthermore, significant assets such as investments in Fortune Park Hotels, Srinivasa Resorts, and ₹1,500 crore in cash reserves will be transferred to ITC Hotels to support its future expansion.
However, ITC’s financial investments in EIH Ltd and HLV Ltd will remain with the parent company, ITC. After the allotment of shares to ITC shareholders, ITC Hotels will apply to the stock exchanges and SEBI for listing approval. The listing process is expected to be completed within 60 days of the NCLT order, in compliance with SEBI regulations.
The demerger proposal was approved by ITC shareholders in June this year, with 99.6% approval from public institutions and 98.4% approval from public non-institutional shareholders.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
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Published on: Jan 1, 2025, 11:04 AM IST
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