ITC Shareholders Approves Hotel Biz Demerger

ITC Limited is an Indian conglomerate company, headquartered in Kolkata. It has a presence across six business segments, namely FMCG, hotels, agribusiness, information technology, paper products, and packaging. The ITC shareholders have approved the demerger of ITC Hotels with a majority of 99.6%.

Proposed Demerger

ITC approved the Scheme of Arrangement between ITC Ltd and ITC Hotels on August 14, 2023. The scheme mentions the issuing of equity shares by the resultant entity to the shareholders of the demerged counterpart. In a more specific way, for every 10 shares held in the company ITC Ltd, shareholders would be entitled to receive 1 share of ITC Hotels Ltd. 

The main point behind the demerger from the company is that the Hotel Business of ITC has been resilient and matured over the years and has the potential to make its growth path.As part of the demerger, ITC Hotels would be given a licence to use the ‘ITC’ prefix as part of its corporate name.

ITC Shareholders approved demerger

ITC Limited’s shareholders overwhelmingly approved the demerger of its hotel business into a separate entity, ITC Hotels Limited, during a meeting on Thursday. An impressive 99.6% of the shareholders voted in favor of the resolution, showcasing strong support for the decision. This approval followed an order from the National Company Law Tribunal (NCLT), which mandated the convening of a meeting for the company’s ordinary shareholders to deliberate on the demerger proposal. The successful vote marks a major step in ITC’s strategic restructuring efforts, aiming to unlock greater value in its hotels division.

Conclusion: The overwhelming approval of ITC Limited’s demerger plan by 99.6% of shareholders marks an important step in the company’s strategic restructuring. This move aims to enhance value in ITC’s hotel division, setting the stage for focused growth and operational efficiency. The stock of ITC Ltd. currently trades at Rs.434 a piece.

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.