Division Boost

By demerging its hotels business, ITC hopes to boost its capital allocation and profitability

- ARNAB DUTTA

HOTELS

SALT-TO-CIGARETTES MAJOR ITC Ltd is spinning off its hotels division — after nurturing it for over two decades — into a separate company in an effort to accelerate its growth and improve resource allocation. The company’s board has given its in-principle approval to the demerger, long-awaited by the company’s shareholders and market experts. The board will still need to ratify the specifics of the demerger on August 14. According to the proposed structure, ITC’s management would hold a 40 per cent stake in the newly established entity that will house its hotels assets and business, while the remaining 60 per cent will be owned directly by ITC shareholders proportionate to their shareholding in the company.