Shares of ITC Ltd were trading in the green and 1.7% higher on 6 June after the company’s shareholders approved the demerger of its hotels business. Around 99.6% shareholders of the company voted towards the demerger whereas the remaining 0.4% voted against this plan. 

In its regulatory filing, the company said, “The resolution for approval of the scheme of arrangement amongst ITC and ITC Hotels and their respective shareholders and creditors passed a notice dated 30 April, 2024 through remote e-voting and e-voting.”

After the demerger, the company will hold a 40% stake in the new entity while the remaining 60% will be held directly by the shareholders. 

The company has selected to hold 40% instead of a vertical split to provide strategic support and synergies with the hotels business, and the company will also charge a small royalty to the hotels business for brand usage. 

The company’s hotels segment has achieved record high revenue and profits during the quarter ending 31 March 2024, supported by strong RevPar growth from retail. 

In its quarterly earnings for January-March, the company reported a 1.31% year-on-year decline in net profit to Rs Rs 5,020 crore and a 1.4% YoY increase in revenue to Rs 17,752 crore.

The Board of Directors of the company have also recommended a final dividend of Rs 7.50 per ordinary share for the fiscal year 2023-24.

At 3:30 pm, the shares of ITC closed 1.42% higher at Rs 436.40 on NSE.