HBI Staff | Hyderabad 
According to Business Today, hotels-to-cigarettes conglomerate ITC Ltd is making significant strides towards listing its hotels business, with plans to carry out the demerger in 2024. The conglomerate’s next board meeting on August 14 is expected to shed light on the upcoming course of action, according to a recent report by The Economic Times.
ITC Limited’s board has already granted in-principle approval for the demerger of its hotels business under a scheme of arrangement. This move comes as part of ITC’s strategic restructuring, with the company retaining a stake of approximately 40% in the new entity. The remaining shareholding of around 60% will be directly held by ITC’s shareholders, distributed proportionately based on their ownership in the company.
ITC Ltd has indicated that it will adhere to the necessary regulations and laws, including those set by the Securities and Exchange Board of India (Sebi), when making announcements and public disclosures related to the demerger.
The process of incorporating a wholly-owned subsidiary for the hotels business is currently underway, with completion pending approval from the Ministry of Corporate Affairs. Once approved, this subsidiary will serve as the foundation for ITC’s hotels portfolio, which includes over 120 hotels spanning more than 70 locations under six distinct brands.
The ITC Hotels division has demonstrated strong growth, registering a Compound Annual Growth Rate (CAGR) of 11% over the past couple of decades. With a diverse portfolio of brands such as ITC Hotels, Mementos, Welcomhotel, Storii, Fortune, and WelcomHeritage, the division has amassed over 11,600 keys across its properties.
In the financial year 2022-23, ITC Hotels reported a revenue of Rs 2,570 crore, contributing 4% to ITC’s total revenues. The division’s Ebitda stood at Rs 830 crore, representing 3% of ITC’s Ebitda, while its capital employed amounted to Rs 5,600 crore, equivalent to 12% of ITC’s total capital employed. The demerger and subsequent listing are poised to offer new opportunities and avenues for growth within ITC’s hotels business.
