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ITC's Hotel Business Demerger on Track for Completion by Year-End

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Synopsis:

 ITC's hotel business demerger is progressing, set to be completed in six months. Listing is expected by year-end. ITC will hold 40% of the new entity, whereas the shareholders will hold the remaining 60%.

ITC Hotel Demerger News Update

Diversified conglomerate ITC announced on Friday, July 26, that the demerger of its hotel business is proceeding as planned and should be completed within the next six months. Investors eye the ITC share price movements in anticipation of the updates about the demerger.

Demerger and Listing Timeline

Addressing the media after ITC's Annual General Meeting (AGM), Chairman and Managing Director (CMD) Sanjiv Puri confirmed that the demerger process is on schedule. The company expects the listing of the hotel business to occur within the 15-18 month timeframe initially mentioned during the demerger announcement last year.

Chairman Puri suggested that the hotel business could be listed by the end of this year, depending on regulatory approvals and processes.

Demerger Details

The demerger of ITC's hotel business into a separate entity was approved last August. According to the scheme of arrangement, ITC will retain a 40% stake in the new entity, while the remaining 60% will be distributed among shareholders.

Shareholders will receive one share of the hotel business for every 10 shares they hold in ITC. The demerger received approval from the Competition Commission of India (CCI) in May and from shareholders in June this year.

Stock Performance

On Friday, the ITC share price closed at ₹501.55 on the NSE, reflecting a rise of ₹12.80 or 2.61%. Year-to-date, the stock has given a return of 7.16%, whereas the one-month return stands at 16.90%.

Key Takeaways

ITC's strategic move to demerge its hotel business aims to streamline operations and unlock value for shareholders. With the demerger set to be completed within the next six months and the listing expected by year-end, ITC is positioning itself for enhanced growth and profitability in the hospitality sector.

The company's ongoing initiatives to boost productivity and explore new revenue streams further underscore its commitment to driving long-term value creation for its stakeholders.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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