New Delhi, 5th July 2023: ITC, a tobacco-to-hospitality giant, is considering concluding a long-stalled bid to demerge its hotels division, which it had put on hold during the pandemic.
A report on CNBC-TV18 states, “ITC, a tobacco-to-hospitality giant, is considering concluding a long-stalled bid to demerge its hotels division, which it had put on hold during the epidemic.”
It also stated that a separate hotel sector listing is being proposed.
Previously, ITC Chairman and Managing Director Sanjiv Puri told The Hindu that the demerger of the conglomerate’s hotel division is “very much on the table” now that the industry has recovered from Covid-19.
Puri stated that following a good rebound in the hotel industry, the company is considering an “alternative business structure” for its hotel operation. He stated that the demerger plan is “back on the table.”
Puri said, “In the 2019-20 annual report, we had said that we would be creating an alternative structure for our hotels business. But we had to put the decision on hold due to the pandemic as the industry was not doing well. We will be taking the plan forward in line with the industry recovery dynamic.”
“In the last 12 months, we opened nearly a hotel every month,” he noted. In keeping with its “asset right” philosophy, the company has an appropriate mix of owned and managed hotels.
ITC had developed many of its own hotels in recent years, which “impacted capital productivity”; as a result, the business determined that it had the “market standing” to have hotels on management contracts.
ITC shares rose 1.85 percent to Rs 475, setting a new high for the firm.
In the fourth quarter of 2022-23, the company’s hotel business increased its revenues by 101% (Rs 782 crore). The company’s EBIDTA was Rs 272 crore, up from Rs 32 crore in the previous year.
ITC, India’s largest cigarette manufacturer and supplier, was founded in 1910. ITC now operates in a variety of business categories, including FMCG, hotels, paperboards, paper & packaging, and agro.
ITC’s stock reached a fresh high on Tuesday. The company generated huge returns as a result of its strong and consistent performance and price movement, combined with high volumes. On Tuesday, ITC’s shares rose around 1% to Rs 466.05, its 52-week high.
