ITC Ltd, a major company based in Kolkata, has announced it will give ₹1500 crore (15 billion) in cash to its hotel business, ITC Hotels. This money will help ITC Hotels grow and prepare for any emergencies. The hotel business plans to spend 8-10% of its earnings on renovations and ongoing projects.
ITC Ltd will keep trademarks for its famous restaurants like Bukhara, Dum Pukht, and Dakshin. ITC Hotels will use these names under a trademark license agreement, and the ITC logo will also be shared.
The demerger of ITC Hotels will take place on January 1, 2025. The record date, which helps determine which shareholders will get shares of ITC Hotels, is January 6, 2025. After receiving approval, the shares of ITC Hotels will be listed within 60 days.
As part of this plan, ITC Hotels will issue shares directly to ITC shareholders. About 60% of ITC Hotels will be owned directly by these shareholders, with the remaining 40% held by ITC Ltd. So, all ITC shareholders will own 100% of ITC Hotels—60% directly and 40% through ITC.
The company mentioned an agreement for ITC to manage and run ITC Grand Central in Mumbai. Other assets related to the hotel business will also be transferred to ITC Hotels.
ITC Hotels aims to have no debt and generate enough cash for growth. They plan to take advantage of new opportunities. Over the next few years, ITC Hotels plans to build over 300 new hotel rooms, including projects in Puri and Bhubaneswar, and will utilize its land for more hotels.
ITC Hotels also has plans for 45 managed hotels with around 4,000 rooms and aims to increase management fees significantly by 2030. Recently, they opened 28 managed hotels in just two years and plan to open more than one hotel each month for the next two years. In five years, ITC Hotels expects to have over 200 hotels with 18,000 rooms, focusing heavily on managed properties.
Meanwhile, ITC Ltd’s share price fell by 0.38% to ₹477.10 on the BSE while the broader Sensex index dropped by 0.57%.
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