ITC fixes record date for demerger of hotels business. Details here

FMCG major ITC Ltd on Wednesday announced the record date for demerger of the company's hotels business. "We write to advise that the Company and ITC Hotels Ltd (ITCHL) have mutually agreed to fix Monday, January 6, 2025 as the Record Date for the purposes of determining the shareholders of the Company to whom equity shares of ITCHL would be allotted in accordance with Clause 18 of the Scheme of Arrangement amongst ITC Ltd and ITC Hotels Ltd and their respective shareholders and creditors under Sections 230 to 232 read with the other applicable provisions of the Companies Act, 2013," it stated in a BSE filing.

The effective date of ITC Hotels' demerger would be January 1, 2025. The NCLT, Kolkata Bench, has sanctioned the scheme of arrangement among ITC and ITC Hotels and their respective shareholders and creditors and the said order was received by ITC December 16, ITC informed exchanges in a separate filing.

To recall, the board members of ITC had on August 14 last year approved the demerger of its hotel business, with ITC all set to hold a stake of 40 per cent in the new entity and the balance shareholding of 60 per cent is to be held directly by ITC's shareholders proportionate to their ITC shareholdings.

The shareholders of ITC will receive 1 equity share of ITC Hotels for every 10 equity shares of ITC held by them. The NCLT (Kolkata bench) has approved the scheme of demerger on October 4, 2024. "As per our fundamental estimates, the demerged hotel business is expected to have a value of Rs 25 per share out of ITC current target price of Rs 530 per share," JM Financial said.

Shares of ITC were last seen trading 0.20 per cent higher at Rs 470.80. At this price, the stock has climbed 9.79 per cent in the last six months. Around 3.88 lakh shares changed hands on BSE today at the time of writing this story. The figure was lower than the two-week average volume of 5.25 lakh shares. Turnover on the counter came at Rs 18.25 crore, commanding a market capitalisation (m-cap) of Rs 5,88,946.47 crore. There were 13,79,358 sell orders against buy orders of 2,40,050 shares.

Technically, the counter traded higher than the 5-day, 10-, 20-day and 200-day simple moving averages (SMAs) but lower than the 30-day, 50-, 100-day and 150-day SMAs. The scrip's 14-day relative strength index (RSI) came at 48.01. A level below 30 is defined as oversold while a value above 70 is considered overbought.

As per BSE, the company's stock has a price-to-equity (P/E) ratio of 28.54 against a price-to-book (P/B) value of 8.06. Earnings per share (EPS) stood at 16.46 with a return on equity (RoE) of 28.22.