ITC Hotels Demerger Takes Effect: A New Era for India’s Hospitality Giant

Kolkata, January 7, 2025 – ITC Limited, the Indian group that sells everything from cigarettes to hotel stays, has spun off its hotel business. This is kind of a big deal. As of January 1, 2025, ITC Hotels Limited is its own company, trading on the NSE and BSE. The split got the thumbs up from the National Company Law Tribunal (NCLT) and shareholders. This opens up some new possibilities for both ITC and the new hotel group.

The plan was announced in July 2023, and it went through after the NCLT gave its okay on October 4, 2024. ITC shareholders got 60% of ITC Hotels’ shares, and ITC kept 40%. If you owned ten ITC shares, you got one ITC Hotels share. January 6, 2025, was the date they used to figure all that out. Experts think the new hotel company is worth between ₹36,200 and 42,000 crore. It’s in a good spot to take advantage of India’s growing hotel business, thanks to more Indians traveling and interest from abroad.

ITC Hotels now has no debt and about ₹1,500 crore in the bank. They run 140 hotels with around 13,000 rooms. About 45% of those hotels are owned by ITC, and the rest are managed. In the first half of the year, they made ₹1,471 crore in revenue and had a 28% profit margin. This was mostly because of strong demand from stores, conferences, and big events. Experts think ITC Hotels shares will start at around ₹175–190, which is in line with what other companies in the industry are worth.

According to Sanjiv Puri, Chairman and MD of ITC, this split lets ITC Hotels grow faster while still being connected to ITC’s good name. The goal is to have over 200 hotels and 18,000 rooms by 2030. They want to mostly manage hotels rather than own them, with a target of 65% managed properties. ITC Hotels will pay ITC a bit of money to use the ITC brand.

For shareholders, this means they now have a direct stake in a hotel business that’s expected to grow quickly. This could increase the value of their investment. The move should also help ITC make more money from its investments since the hotel business used to tie up a lot of assets but didn’t bring in as much revenue. People in the industry think this is a good move for everyone involved. ITC Hotels should be able to attract investors and partners who know the hotel business.

With big events like the Simhastha Mahakumbh in 2028 coming up, ITC Hotels is ready to change what people expect from luxury hotels. For the latest on share distribution and trading, check out www.itcportal.com or your stockbroker.