Latest News | ITC Hotels Demerger: Shares Slump Further, Fall over 3 Pc in Early Trade
Get latest articles and stories on Latest News at LatestLY. Shares of diversified entity ITC on Tuesday slumped more than 3 per cent in the early trade on the exchanges after the conglomerate said it will demerge its hotels business by incorporating a wholly-owned subsidiary ITC Hotels Ltd.
New Delhi, Jul 25 (PTI) Shares of diversified entity ITC on Tuesday slumped more than 3 per cent in the early trade on the exchanges after the conglomerate said it will demerge its hotels business by incorporating a wholly-owned subsidiary ITC Hotels Ltd.
In the initial trade, the stock declined 3.12 per cent to Rs 456.65 apiece on the NSE.
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A similar movement was also seen on the BSE, where the scrip of ITC fell 3.05 per cent to Rs 456.55 per share.
Meanwhile, the 30-share BSE Sensex was trading at 43.91 points or 0.07 per cent lower at 66,340.87 points.
On Monday, the ITC stock had settled with a loss of 3.86 per cent at Rs 470.90 apiece on BSE.
"The Board of Directors of ITC Ltd at its meeting held on July 24, 2023, evaluated and discussed various alternative structures for the Hotels Business. After due consideration, the Board accorded its in-principle approval to the demerger of Hotels Business under a scheme of arrangement," the company said in a regulatory filing on Monday.
Its board has also approved the incorporation of the wholly-owned subsidiary ITC Hotels Ltd, which will handle its hotels and hospitality business, it added.
The scheme of arrangement shall be placed for approval of the board at its next meeting to be convened on August 14, 2023.
"ITC's hotel business demerger approval may unlock shareholder value with a direct stake in the new entity, but it disappoints some street expectations," Prashanth Tapse, Sr VP Research analyst at Mehta equities ltd said.
The proposed hospitality-focused entity aims for growth and value creation in the Indian hospitality industry, benefiting both ITC and the new entity through institutional synergies, Tapse said, adding that "Clarity on the scheme of arrangement is awaited until the Board meeting on 14th August, 2023."
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)