ITC allots 125.11 crore shares of ITC Hotels to shareholders

Kolkata-based conglomerate ITC Ltd. has allotted 125.11 crore equity shares of ITC Hotels to its shareholders. ITC Ltd. The decision was finalized during the board meeting on January 11, 2025 following a plan of arrangement between and ITC Hotels (ITCHL).

In an exchange filing, ITC said, “The Board of Directors of ITCHL, in a meeting held today on January 11, 2025, has allotted 125,11,71,040 equity shares of Rs 1 each to the shareholders of the company of record. Dated, January 6, 2025, ITC Ltd., pursuant to a scheme of arrangement between ITCHL, and their respective shareholders and creditors.”

Following this development, ITC Hotels has ceased to be a subsidiary of ITC Limited, effective January 11, 2025.

Allotment of shares is part of restructuring under Sections 230 to 232 of the Companies Act, 2013, which focuses on demerger and restructuring of two companies. ITC Hotels plans to apply for a listing of the newly allotted shares, which will remain frozen until the necessary permissions for trading are granted by the stock exchanges.

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As part of the demerger deal, ITC will retain 40% of the hotel shareholding, and the remaining 60% will be distributed equally among existing ITC shareholders.

ITC is yet to announce the listing date as it requires regulatory approval. However, the market expects the stock exchange to list by mid-February.

ITC said the demerger will help the hotel business attract suitable investors and strategic partners/collaborators whose investment strategies and risk profiles are more closely aligned with the hospitality industry.

Additionally, it will unlock the value of the hotels business with its independent market-based valuation by providing the company’s shareholders with a direct stake in the new entity. The company’s move also reinforces the aggressive capital allocation strategy it has put in place in recent years, which has manifested itself in the hotels business as a major form of ‘asset-right’ strategy.

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The demerger positions ITC Hotels to become India’s second largest hotel chain with a portfolio of 140 hotels.

ITC has a strong presence in sectors including FMCG, hospitality, paperboards and packaging, known for brands such as Aishwari, Sunfeast and Classmate.

Meanwhile, ITC Hotels has a portfolio of luxury properties in major cities and tourist destinations. The company operates several prestigious brands including ITC Grand Bharat and WelcomeHotel, which are known for their premium offerings in the hospitality sector.

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