ITC approves demerger of hotels business, shares slide

Under the approved plan, the new entity would be majority-owned directly by the company's shareholders, holding approximately 60 percent of the stake, while ITC Limited would retain about 40 percent

The Board of ITC Limited has granted in-principle approval for the demerger of the hotels business under a scheme of arrangement, the company said in a regulatory filing on July 24.

The proposed restructuring would pave the way for the hotel business to operate as a separate entity in the rapidly expanding hospitality industry, focusing on its growth path with an optimal capital structure.

Creation of a hospitality-focused entity will engender the next horizon of growth and value creation by harnessing the exciting opportunities in the Indian hospitality industry.