“The Board of Directors of ITCHL, at its meeting held today, January 11, 2025, has allotted 125,11,71,040 equity shares of Rs 1 each to the shareholders of the company on record basis,” ITC said in an exchange filing. Pursuant to the plan of agreement between ITC Limited, ITCHL and its shareholders and creditors, dated January 6, 2025.
Following this development, ITC Hotels will cease to be a subsidiary of ITC Ltd. from January 11, 2025.
The share allocation is part of the restructuring under Sections 230-232 of the Companies Act, 2013, which focuses on demerger and reorganization of the two companies. ITC Hotels plans to apply for listing of its newly allocated shares, which will remain frozen until it receives the necessary trading permission from the stock exchange.
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As part of the spin-off agreement, ITC will retain a 40% stake in the hotel and the remaining 60% will be distributed equally among existing ITC shareholders. ITC has not yet announced a listing date as it requires regulatory approval. However, the market expects the stock to be listed on the stock exchange by mid-February. ITC said the spin-off will help the hotel business attract the right investors and strategic partners/associates, and will align its investment strategy and risk profile more closely with the hotel industry. .
Additionally, we will unlock the value of the hotel business for the company’s shareholders by providing a direct equity stake in the new entity with an independent, market-driven valuation. The company’s move also reinforces the sharper capital allocation strategy it has implemented in recent years, seen in the hotel business’ shift towards an ‘asset rights’ strategy.
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With this spin-off, ITC Hotels becomes the second largest hotel chain in India with a portfolio of 140 hotels.
ITC has a strong presence in several sectors including FMCG, Hotels, Paperboard, Packaging, etc. Known for brands like Aashirvaad, Sunfeast and Classmate.
Meanwhile, ITC Hotels has a portfolio of luxury hotels across major cities and tourist destinations. The company operates several iconic brands including ITC Grand Bharat and WelcomHotel, known for their premium products in the hotel segment.
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