HBI Staff | Hyderabad 
After a detailed process, January 6 has been marked as the record date for the much-anticipated demerger of ITC Hotels. Announced in July 2023, the move will see ITC retaining a 40% stake in the hotel business, while the remaining 60% will be distributed to shareholders through rights entitlements. Shareholders will receive one ITC Hotels share for every 10 ITC shares held.
Currently contributing 4% of ITC’s total revenue and 2.5% of EBIT, ITC Hotels accounts for 14% of ITC’s total assets, making the demerger accretive to ITC’s return on capital employed (ROCE). With 140 properties and approximately 13,000 keys, the hotel chain aims to expand to 200 hotels and 18,000 keys by 2030, focusing on managed operations.
For H1FY25, ITC Hotels posted a revenue of INR 1,471 crore with EBITDA margins of 28%. The revenue mix comprises 52% from room bookings, 40% from food and beverages, and 8% from other services. Financially robust, the company has zero debt and INR 1,500 crore in cash reserves. Only 20% of its inventory operates at 75% of potential occupancy, underscoring its significant growth potential.
By FY25, ITC Hotels is projected to generate INR 3,680 crore in revenue, increasing to INR 4,400 crore by FY26, with EBITDA margins rising to 32-33%. Its equity value is estimated between INR 36,200 crore and INR 42,000 crore.
When ITC Hotels lists independently, its share price is expected to range between INR 175 and INR 190, adding INR 17-19 per ITC share. This demerger is poised to unlock substantial value for both ITC and its shareholders.
source: CNBC
