Shares of ITC were trading higher in Tuesday's trade after the FMCG major said the appointed and the effective date of the demerger of its hotels business ITC Hotels Ltd will be January 1, 2025. The NCLT, Kolkata Bench, has sanctioned the scheme of arrangement among ITC and ITC Hotels and their respective shareholders and creditors and the said order was received by ITC December 16 at 5.26 pm, ITC informed BSE and NSE on Tuesday.
ITC shares were trading 0.63 per cent higher at Rs 473. The FMCG stock has risen 12 per cent in 2024 so far against 1.1 per cent rise in the BSE FMCG index during the same period.
"We further advise that ITC Limited and ITC Hotels Limited have mutually acknowledged that all the conditions specified in Clause 28 of the Scheme have been fulfilled and satisfied, including filing of the aforesaid Order with the Registrar of Companies, West Bengal, and accordingly, the Appointed Date and the Effective Date of the Scheme shall be the first day of the following month i.e. 1st January, 2025, in accordance with Clauses 5.1(iii) and 5.1(xvi) of the Scheme, respectively," ITC said.
To recall, the board members of ITC had on August 14 last year approved the demerger of its hotel business, with ITC all set to hold a stake of 40 per cent in the new entity and the balance shareholding of 60 per cent is to be held directly by ITC's shareholders proportionate to their ITC shareholdings.
The shareholders of ITC will receive 1 equity share of ITC Hotels for every 10 equity shares of ITC held by them. The NCLT (Kolkata bench) has approved the scheme of demerger on October 4, 2024. "As per our fundamental estimates, the demerged hotel business is expected to have a value of Rs 25 per share out of ITC current target price of Rs 530 per share," JM Financial said.
Jefferies in a note earlier this month noted that other than the ITC Hotels listing via demerger, three hoteliers namely Schloss Bangalore (Leela), Ventive Hospitality and Brigade Hotels have already filed IPO prospectus in the past 3-4 months and looking to raise about Rs 8,000 crore, including fresh raise of Rs 6,000 crore.
The foreign brokerage said it sees even more real estate players such as DB Realty Ltd (now Valor Estate Ltd) and Prestige Estates eyeing listing of their hotels business. These asset developers like the already listed Chalet, Juniper and Samhi have tie ups with leading hotel operators such as Marriott, Hilton, IHG for the hotel operations, it noted.
Jefferies noted the travel demand in India has remained healthy even post the growth normalisation seen in many consumer segments post Covid. Industry pricing across segments remains elevated without hurting growth, materially, suggesting that Indian consumers are prioritising travel over many other spending categories, also aided by macro trends, it said. The demand and supply growth imbalance continues to support growth in ARRs for the hotel Industry, the brokerage added.