itc hotels net worth: ITC Hotels to have a net worth of Rs 10,000 crore and debt-free balance sheet

The capital structure of ITC Hotels has been around Rs 207.85 crore as of March 2024, which might change a bit on the day of listing as it will issue some shares under the ESOP scheme, Puri told shareholders on Thursday in the NCLT convened audio-visual meeting of ITC Ltd shareholders for the demerger process.

“The demerger will create a separate pure play hotels entity and enable sustained value creation with sharper business focus and strategies aligned with the industry. ITC Hotels will be a profitable company, generate its own cash flow and can raise money on its own to fund its growth plans,” Puri said.

He said the strategy of ITC Hotels will be an asset light approach – a balance between managed properties which will be a large component of expansion and growth, and some “calibrated investments where the board of ITC Hotels thinks so.”

ITC currently operates over 135 hotels in 80 destinations with 12,500 keys. It has opened 24 properties in the past 24 months. Puri said the business will open another 70 new properties over the next five months so that the pace of expansion can improve further.Puri said the process of demerger and listing of ITC Hotels should be completed in another six to eight months with the company having already received approvals from the Securities and Exchange Board of India, Competition Commission of India and the stock exchanges. He said after Thursday’s shareholder meeting, the company will seek approval from the NCLT.
In response to a query, Puri said ITC Ltd’s shareholding in hotel companies like Leela (HLV Ltd) and Oberoi (EIH Ltd) will continue with the company since these are treasury operations and not move to ITC Hotels. The company owns around 7.58% in HLV and 13.69% in EIH as of March. Russell Credit – a wholly-owned subsidiary of ITC Ltd – also owns 2.44% in EIH.

As per the demerger plan, 60% of ITC Hotels will be owned directly by individual ITC Ltd shareholders and the remaining 40% will continue to be held by ITC Ltd. Hence, ITC Ltd shareholders will continue to have 100% beneficial economic interest in ITC Hotels through 60% directly and 40% through their shareholding in the parent company. Shareholders will receive one share of ITC Hotels for every ten shares they own in ITC Ltd.