MUMBAI: The tobaccos to hotels and FMCG major ITC on Thursday said an overwhelming majority of its shareholders — as much as 99.6% — approved the demerger of its hotels business which may eventually get listed.
The company informed the exchanges that as much as 99.6% of the shareholders voted in favour of the demerger, while just 0.4% voted against it.
“The resolution for approval of a scheme of arrangement amongst ITC and ITC Hotels and their respective shareholders and creditors passed notice dated April 30, 2024 through remote e-voting and e-voting,” the filing said.
The decision sent its stocks rising by 1.2 % to Rs 435.50 at close after rallying to Rs 437.80 intra-day, which came on the heels of a near 5% rally yesterday. But so far this year, the index heavy-weight is down over 5% as against 4 percent gain in the Nifty. It had hit 52-week high of Rs 499 July 24 last.
In the March quarter, ITC’s net profit declined 1.31% on-year to `5,020 crore, while revenue rose modestly by 1.4 percent to17,752 crore as smuggled cigarettes continued to eat into its business. Despite this, the company declared a final dividend of Rs 7.50/share for the financial year 2024.
The earnings statement said the hotels segment had record high revenue and profit during the quarter, supported by strong room per revenue growth. Segmental revenue grew 15.6% to Rs 2,989 crore and operating profit jumped 26.2% to Rs 1,049 crore.
Earlier media reports said the proposed demerger was aimed at value unlocking and the hotels arm will be taken public at an appropriate time. But today’s filing was silent on this. The process will create a strong foundation for accelerating growth and sustained value creation by providing long-term stability and strategic support to ITC Hotels, while instilling a sense of assurance among stakeholders, including partners and employees, the company had earlier said.