ITC sets record date for demerger of hotels business; How many shares will you receive?

A leading blue-chip company with a diverse portfolio across sectors such as tobacco, FMCG, hotels, agribusiness, and IT has set January 6 as the record date for the demerger of its hotel business, aiming to streamline operations and enhance shareholder value. 

Price Movement 

The share price of ITC Ltd reached an intra-day high of Rs.473.80 per share on Wednesday, rising 1 percent from its previous close of Rs.469.55 per share. Over the past 6 months, the share has delivered returns of over 160 percent. 

What Happened 

ITC Ltd. has set January 6 as the record date to determine eligible shareholders for receiving shares in its demerged hotels business, ITC Hotels Ltd. 

The demerger, effective from January 1, allows ITC to retain 40 percent ownership in the hotel business, with shareholders receiving the remaining 60 percent in proportion to their holdings. Shareholders will get one share of ITC Hotels Ltd. for every 10 shares of ITC Ltd. 

The demerger, approved by 99.6 percent of ITC shareholders despite opposition from Institutional Investor Advisory Services, aims to position the hotel business for independent growth in the hospitality sector. ITC Hotels Ltd. will have an equity capital of Rs.207.84 crore, with 207.84 crore shares of Rs.1 face value. 

Business Segments 

ITC is a leading FMCG company in India with a diverse portfolio spanning tobacco products like Gold Flake, food brands such as Aashirvaad and Sunfeast, personal care items, and stationery under the Classmate brand. 

Its other business segments include luxury hotels through ITC Hotels, agribusiness initiatives like e-Choupal for farmer empowerment, IT services via ITC Infotech, and leadership in the paperboard and packaging industry. 

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Financials 

Turning towards the financials of the company, ITC Ltd reported Q2 FY25 revenue of Rs.20,736 crore, up 17 percent from Rs.17,774 crore in the same quarter last year. Profit After Tax (PAT) increased by 2 percent to Rs.5,054 crore, compared to Rs.4,965 crore in the same period. 

About the company 

ITC Limited, based in Kolkata, India, is a leading conglomerate with a diverse presence across various sectors. Founded in 1910 as the Imperial Tobacco Company of India Limited, the company has grown beyond its tobacco origins to include FMCG, hotels, agribusiness, IT services, paper products, and packaging in its portfolio.

Written by – Siddesh S Raskar 

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