ITC is demerging its hotel business

Stocks
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After years of speculation, ITC has finally decided to demerge its Hotels business, with the company holding 40% stake in the new entity, while the balance 60% will be held by the company’s shareholders proportionately.

Feels like a different way to setup this, But, this is the best way to ensure that current management doesn’t lose out the control of the entity as there can always be a chance of hostile takeover especially if BAT (the British American tobacco company) exits the hotels business.

ITC-derger
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Some interesting data on ITC Hotels -

  • 120 hotels, 11,600 keys across 70+ locations

FY23 Hotels Segment

  • Revenue for the year doubled to Rs 2585 Cr
  • Segment EBITDA at Rs 831.62 crores, as against ` 78.03 crores in FY22
  • Segment PBIT for the year stood at Rs 542 Cr v/s loss the previous year. 724.99 crores jump over FY22

Source : Aditya kondawar

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How many shares of ITC hotels will the investors in each share of ITC get? And, what would be the listing price?

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Details are not yet announced. Company has conveyed that board is going to take up this proposal on August 14th.