December 18, 2024
New Delhi, India
ITC Limited and ITC Hotels Limited
ITC Limited and ITC Hotels Limited (ITCHL) have announced January 6, 2025, as the record date for identifying shareholders eligible to receive equity shares of ITCHL. The demerger of ITC’s hotel business is set to take effect from January 1, 2025, marking a significant milestone for the conglomerate.
This announcement follows the required approvals, including the nod from the National Company Law Tribunal (NCLT) in October 2024. Shareholders overwhelmingly supported the demerger in June 2024, with nearly 99% voting in favor.
Key Details of the Demerger:
- Effective Date: January 1, 2025
- Record Date: January 6, 2025
- Share Distribution: ITC shareholders will receive 1 equity share of ITCHL for every 10 equity shares held in ITC.
- Post-Demerger Shareholding:
- ITC Limited retains a 40% stake in ITCHL.
- Remaining 60% directly allotted to ITC shareholders.
ITCHL will also pay a nominal royalty to ITC for the continued use of the ITC brand name, ensuring consistency in branding across its ventures.
Strategic Realignment:
In addition to the demerger, ITC consolidated its stakes in Oberoi (EIH Ltd) and Leela (HLV Ltd) hospitality chains. Shares held by its subsidiary, Russell Credit Ltd., will now be transferred to ITC Limited, further strengthening ITC’s position in the hospitality sector.
- EIH Stake: 13.69% (direct) + 2.44% (via Russell Credit)
- HLV Stake: 7.58% (direct) + 0.53% (via Russell Credit)
Stock Performance:
ITC shares have remained flat on December 18, trading at ₹469.65 during the day. The stock has delivered modest returns in 2024, declining for three consecutive months, with a cumulative 9.5% loss since October.
Outlook:
The demerger is expected to unlock value for shareholders, enabling ITC to focus on its core businesses while ITCHL continues to expand its presence in the hospitality sector. Analysts believe this strategic move positions both companies for long-term growth.
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