Kolkata-based diversified conglomerate ITC on Tuesday announced that as all approvals are in place the demerger of ITC Hotels will come into effect from 1st January 2025.
Earlier in October this year, the Kolkata bench of the National Company Law Tribunal (NCLT) approved the demerger between ITC Limited and ITC Hotels Limited.
The demerger scheme will be effective on the first day of the following month after filing of certified copy of the NCLT order with the Registrar of Companies, West Bengal, and fulfilling other conditions & matters.
ITC said it got a copy of the NCLT order on 16th December.
“We further advise that ITC Limited and ITC Hotels Limited have mutually acknowledged that all the conditions specified in Clause 28 of the Scheme have been fulfilled and satisfied, including filing of the aforesaid Order with the Registrar of Companies, West Bengal, and accordingly, the Appointed Date and the Effective Date of the Scheme shall be the first day of the following month i.e. 1st January, 2025, in accordance with Clauses 5.1(iii) and 5.1(xvi) of the Scheme, respectively,” it said in a regulatory filing.
Shareholders had already approved the demerger in June, with the resolution passing with the requisite majority. The Competition Commission of India (CCI) cleared the proposal in May. ITC has emphasized that its hotels business has matured and is now ready to chart its own growth path as a separate entity with a focused business approach and optimal capital structure.
The company announced its plans to demerge its hotel business in August 2023 into a separate entity. Under this demerger scheme, ITC will maintain 40% ownership of ITC Hotels, with ITC shareholders acquiring the remaining 60% in proportion to their stake in the parent entity.
Optimism around the listing of the hotel business took ITC shares to a 52-week high of Rs 528.55 on BSE in September-end. The stock was trading flat at Rs 470.60 during the day and has underperformed Sensex by giving a small return of less than 3% in the last one year.
In the September quarter, ITC’s hotel business reported revenue growth of 12.1% YoY while its EBITDA margin expanded 70 bps YoY driven by higher RevPAR, operating leverage and strategic cost management.
ITC remains a consensus buy on Dalal Street with only 2 out of 35 analysts with a coverage on the stock giving it sell ratings, shows Trendlyne data.
