- Dates to Note:
- The effective date for the demerger is set for January 1, 2025.
- The record date to determine eligible shareholders for ITC Hotels shares is January 6, 2025.
- Share Distribution:
- Shareholders will receive 1 share of ITC Hotels for every 10 ITC shares held. This ensures that existing shareholders continue to benefit from the newly created entity.
- Valuation and Market Dynamics:
- ITC’s share price is anticipated to decline by ₹18-25 to reflect the separation.
- ITC Hotels shares are expected to list at an initial price range of ₹113-175 per share, based on current estimates.
- These shares will be listed on stock exchanges within 60 days, following regulatory approvals.
- Financial Setup:
- ITC Hotels will operate with zero debt and have ₹1,500 crore in cash reserves transferred from ITC for growth and contingencies.
- For the first half of FY25, ITC Hotels posted revenue of ₹1,450 crore and profit before tax of ₹304 crore, indicating strong performance.
- Operational Framework:
- ITC Hotels currently manages 140 properties with 12,965 keys, with a pipeline of 4,300 additional keys targeted for completion by 2030.
- The company’s focus is on an asset-light model, with 33% of its portfolio managed through contracts, expected to grow to 42% in the next five years.
- Strategic Collaborations:
- The hotels business will continue using ITC’s iconic trademarks like Bukhara and Dum Pukht under a licensing agreement.
- Key properties, such as ITC Grand Central in Mumbai, will remain under operational service agreements.
- Growth and Investments:
- ITC Hotels plans to reinvest 8-10% of its annual revenues into renovations, ongoing projects, and expansions.
- Growth will be fueled by both organic efforts and selective acquisitions, leveraging internally generated funds.
This demerger is aimed at unlocking shareholder value and fostering growth for ITC Hotels as an independent entity.