Key Points
The board finally cleared the demerger with shareholders getting 1 share of ITC Hotels for every 10 shares held in the parent company - a ratio that is unlikely to enthuse most investors...
Underperformance of the agri division - adversely impacted by the ban on wheat exports - pulled down the overall revenue growth of the company..
Besides agri division, the paper business too posted subdued performance with revenues dropping 6% and segmental income declining 23%...
Subdued demand both in domestic and export markets, competition from low priced Chinese supplies in global markets, sharp reduction in global pulp prices and high-base effect impacted its performance..
With the hotels division demerger details having been spelt out and a lacklustre quarterly performance, the Street is unlikely to have a fresh trigger for spurring another rally in the ITC stock..
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ITC board gives in-principle nod for demerger of hotels business
24, Jul, 23ITC's board has given an in-principle nod for the demerger of its hotels business. ITC currently has over 120 hotels and 11,600 keys across over 70 locations. Under the new scheme, the company would hold a stake of around 40% and the balance will be held by the companys shareholders proportionate to their shareholding in the company
ITC board approves in-principle demerger of hotel business, to hold 40% stake in new entity
24, Jul, 23In a stock exchange filing, the company said it would hold a stake of around 40 per cent in the new entity and the balance will be held by the company’s shareholders proportionate to their shareholding in the company.
ITC spinning off its hotels business is good news for investors
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Why ITC share price fell 4% on much-awaited hotel business demerger announcement? - Explained
24, Jul, 23ITC share price: ITC's stock fell 3.87 per cent after the company announced the demerger of its hotel business, with only partial value unlocking expected.
ITC Hotels demerger not a big game changer for shareholders: Amnish Aggarwal
25, Jul, 23ITC's decision to demerge its hotel business is not likely to be a game-changer for shareholders, says Amnish Aggarwal, Head-Research at Prabhudas Lilladher. The capital-intensive hotels business only accounts for around 5% of ITC's value, with 80% attributable to its cigarettes and FMCG operations. While some expectations were built into the stock price in anticipation of the move, ITC shareholders will not see a significant value unlocking.
ITC Hotels listing likely in FY25. What should investors do before demerger?
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