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. The decision was finalized during a Board meeting on January 11, 2025, following a scheme of arrangement between ITC Ltd. and ITC Hotels (ITCHL).

In an exchange filing, ITC stated, “The Board of Directors of ITCHL, at the meeting held today, January 11, 2025, has allotted 125,11,71,040 equity shares of Rs 1 each to the shareholders of the company as of the record date, January 6, 2025, pursuant to the Scheme of Arrangement among ITC Limited, ITCHL, and their respective shareholders and creditors.”

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

The share allotment is part of the restructuring under Sections 230 to 232 of the Companies Act, 2013, focusing on the demerger and reorganization of the two companies. ITC Hotels plans to apply for listing 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 equally distributed among existing ITC shareholders.ITC has not yet announced the listing date as it requires regulatory approvals. However, the market expects the stock to be listed on stock exchanges by mid-February.ITC said the demerger will help the hotels business in attracting appropriate investors and strategic partners/ collaborations whose investment strategies and risk profiles are aligned more sharply with the hospitality industry.

In addition, it will unlock value of the Hotels Business for the Company’s shareholders by providing them a direct stake in the new entity along with an independent market driven valuation thereof. This move by the Company also reinforces the sharper capital allocation strategy put in place in recent years, manifested in the pivot to ‘asset-right’ strategy in the Hotels Business.

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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 across sectors including FMCG, hospitality, paperboards, and packaging, known for brands like Aashirvaad, Sunfeast, and Classmate.

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

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