CCI approves demerger of ITC's hotel business into a separate entity

The CCI approval paves way for the shares of ITC Hotels to be listed separately. NCLT has directed ITC to convene a meeting of shareholders on June 6 to consider the proposed demeger.
The board of ITC had on August 14, 2023 approved the demerger of the hotels business, with an indicative timeline of listing of the new entity in about 15 months.
 

The Competition Commission of India (CCI) has approved the demerger of the hotel business of ITC into a separate entity.

The approval paves way for the shares of ITC Hotels to be listed separately. The National Company Law Tribunal (NCLT) has directed ITC to convene a meeting of shareholders on June 6, 2024 to consider and approve the proposed demeger of its hotel business.

The board of ITC had on August 14, 2023 approved the demerger of the hotels business, with an indicative timeline of listing of the new entity in about 15 months. ITC shareholders are to hold about 60 percent direct stake in ITC Hotels (proportionate to their stake in ITC) and the remaining 40 percent stake to continue with ITC. No cash consideration is payable under the demerger scheme.

The proxy advisory firms have a mixed view on the proposed demerger and separate listing of the hotels business. InGovern and Stakeholders Empowerment Services (SES) have recommended shareholders vote in favour, whereas Institutional Investor Advisory Services (IiAS) has advised voting against the resolution.

ITC's Segment Revenue of the hotel business reached Rs 2989.50 crore during Q4FY24, and Segment EBITDA was Rs.1049.88 crore.