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ITC Ltd is consolidating its hospitality presence by acquiring additional stakes in Oberoi (EIH) and Leela (HLV) hotels, increasing its shareholding to 16.13% in EIH and 8.11% in HLV. These acquisitions, executed via its subsidiary Russell Credit Ltd., underscore ITC's commitment to the premium hospitality segment. ITC is also demerging its hotel business into a standalone entity, ITC Hotels Ltd., effective January 1, 2025, allowing focused growth in the hospitality sector. Shareholders will receive 60% of ITC Hotels' equity shares, with ITC retaining 40%. The restructuring aims to enhance shareholder value and streamline operations, positioning ITC Hotels for independent expansion in India's luxury hospitality market.
ITC Ltd has taken a decisive step in strengthening its footprint in the hospitality sector by acquiring shares in hotel chains Oberoi (EIH) and Leela (HLV). The company recently announced that it had purchased a 2.44% stake in EIH, amounting to 1.52 crore equity shares, and a 0.53% stake in HLV, equivalent to 34.60 lakh equity shares, from its wholly owned subsidiary Russell Credit Ltd. (RCL). These acquisitions bring ITC's total shareholding to 16.13% in EIH and 8.11% in HLV. The transaction, executed at book value as recorded in RCL's accounts, consolidates ITC's position in the premium hospitality market. Advertisement
In October, ITC's board approved the consolidation of its shareholdings in EIH and HLV under the parent entity. EIH operates iconic luxury brands like Oberoi and Trident, while HLV manages the renowned Leela Mumbai. This strategic move highlights ITC's commitment to solidifying its presence in the upscale hospitality segment. Parallelly, ITC has completed plans to demerge its hotel business into a new entity, ITC Hotels Ltd., effective January 1, 2025. The demerger will create a wholly owned subsidiary dedicated to managing ITC's hospitality operations.
ITC has also designated January 6, 2025, as the record date to identify shareholders eligible for equity shares in the new entity. Under this arrangement, ITC will directly allocate 60% of ITC Hotels' shares to its shareholders based on their holdings and will retain the remaining 40%. This strategic restructuring follows regulatory endorsements, including approval from the National Company Law Tribunal (NCLT) on October 4 and prior consent from ITC shareholders.
ITC Hotels will inherit investments from ITC's hospitality subsidiaries, including Bay Islands Hotels Ltd, Fortune Park Hotels Ltd, Landbase India Ltd, Srinivasa Resorts Ltd, WelcomHotels Lanka Pvt Ltd, Gujarat Hotels Ltd, International Travel House Ltd, and Maharaja Heritage Resorts Ltd. Since its establishment in 1975, ITC Hotels has become synonymous with luxury, operating over 140 properties across more than 90 locations in India. By creating a focused hospitality arm, ITC seeks to unlock greater value and enable ITC Hotels to pursue growth opportunities independently.
This move aligns with ITC's broader vision of driving sustainable growth and enhancing shareholder value. The company expects the hospitality demerger to empower ITC Hotels to innovate and expand while allowing ITC to streamline its operations. Shares of ITC Ltd reflected investor confidence, closing at INR 470.65 on Wednesday, up 0.17% on the BSE.
Through this calculated strategy, ITC is poised to redefine its position in the luxury hospitality market, leveraging its legacy and expertise to maintain its competitive edge. The demerger marks a pivotal moment in ITC's journey, laying the foundation for long-term growth and leadership in India's hospitality landscape.
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