ITC Share Price Jumps 2.2% After NCLT Approves Hotel Business Demerger
Contents
- 1 ITC share price
- 1.1 ITC Share Price Jumps 2.2% After NCLT Approves Hotel Business Demerger
- 1.1.1 NCLT’s Kolkata Bench Approves ITC’s Game-Changing Demerger
- 1.1.2 What the Demerger Means for Shareholders
- 1.1.3 ITC’s Market Performance: Steady Growth with a Surge
- 1.1.4 Financial Highlights: A Solid Q1 Performance in FY25
- 1.1.5 Conclusion:
- 1.1.6 FAQs:
- 1.1.6.1 1.Why did ITC shares rise recently?
- 1.1.6.2 2.What is the ITC hotel business demerger?
- 1.1.6.3 3.How will the demerger benefit ITC shareholders?
- 1.1.6.4 4.When will the ITC hotel demerger become effective?
- 1.1.6.5 5.What was ITC’s market cap after the share price increase?
- 1.1.6.6 6.How has ITC’s stock performed in 2024?
- 1.1.6.7 7.How did ITC perform financially in Q1 FY25?
- 1.1.6.8 8.What role did the NCLT play in ITC’s demerger?
- 1.1.6.9 9.What is the significance of ITC Hotels becoming a separate entity?
- 1.1.6.10 10.How has ITC balanced profit and revenue in FY25?
- 1.2 ITC share price
- 1.3 Varun Beverages Stock Receives ‘Buy’ Call from Citi | 38% Upside Projection
- 1.1 ITC Share Price Jumps 2.2% After NCLT Approves Hotel Business Demerger
ITC Limited’s shares surged by 2.2% to hit Rs 514.8 on Monday after receiving the green light from the National Company Law Tribunal (NCLT) for the demerger of its hotel business. This strategic move is poised to transform the company’s portfolio, allowing its hotel division to operate as an independent entity while unlocking potential growth for shareholders.
NCLT’s Kolkata Bench Approves ITC’s Game-Changing Demerger
The approval came from the Kolkata bench of the NCLT in a filing on Friday. According to the demerger plan, ITC shareholders will now own 60% of the new hotel entity, while ITC itself will retain a 40% stake. The demerger will officially take effect once the necessary filings and conditions are completed, including the submission of a certified copy of the NCLT’s order to the Registrar of Companies in West Bengal.
This move signals a significant shift for ITC as it aims to allow its hotel business to chart its own independent growth path, focusing on a more specialized and capital-efficient strategy.
ITC shareholders had already voiced their support for the demerger back in June 2024, with the resolution passing the vote by a requisite majority. The Competition Commission of India (CCI) had cleared the demerger proposal even earlier, in May 2024.
For shareholders, this strategic split means direct ownership in ITC Hotels, an asset that has grown steadily over the years. ITC emphasized that its hotel business has matured, making it the perfect time for the demerger to take place. By doing so, ITC Hotels can now pursue an independent strategy while optimizing its capital structure for sustainable growth.
ITC’s Market Performance: Steady Growth with a Surge
At 10:11 am, ITC shares were trading 2.13% higher at Rs 514.15 on the Bombay Stock Exchange (BSE). The stock has been a standout performer, gaining 10% year-to-date and showing a remarkable 54% surge over the last two years. This performance speaks volumes about the company’s robust financial strategy and market resilience.
As of today, ITC’s market capitalization stands tall at a staggering Rs 6,43,390 crore, positioning the company as one of the largest players in the Indian market.
Financial Highlights: A Solid Q1 Performance in FY25
In its Q1 FY25 results, ITC posted a marginal increase in standalone net profit, reporting Rs 4,917.45 crore, up from Rs 4,902.74 crore in the same period the previous year. The company’s revenue from operations saw a 7% rise, reaching Rs 18,219.74 crore, compared to Rs 16,995.49 crore in Q1 FY24.
However, sequentially, there was a 2% decline in profit from Rs 5,020.20 crore in Q4 FY24, although the company’s revenue did increase 2.6% from Rs 17,752.87 crore in the previous quarter. These numbers demonstrate ITC’s consistent financial performance, even amid a transformative period for the company.
Conclusion:
ITC’s bold decision to demerge its hotel business is set to unlock immense value for shareholders. ITC share price, With a significant 2.2% jump in stock price and strategic approval from NCLT, this move positions ITC Hotels for independent growth while allowing the parent company to focus on its core verticals. ITC continues to demonstrate its financial strength and market agility, cementing its place among India’s leading conglomerates.
FAQs:
A. ITC shares rose by 2.2% after the NCLT approved the demerger of its hotel business.
2.What is the ITC hotel business demerger?
A. ITC is splitting off its hotel business into a separate entity, with ITC shareholders owning 60% of the new company and ITC retaining 40%.
A. Shareholders will have direct ownership in ITC Hotels, which can now pursue independent growth, potentially leading to better returns.
4.When will the ITC hotel demerger become effective?
A. The demerger will take effect after ITC files a certified copy of the NCLT order and fulfills other necessary conditions.
A. ITC’s market capitalization reached Rs 6,43,390 crore following the 2.2% stock price increase.
6.How has ITC’s stock performed in 2024?
A. ITC stock is up 10% year-to-date and has surged 54% over the past two years.
7.How did ITC perform financially in Q1 FY25?
A. ITC reported a marginal rise in standalone net profit, posting Rs 4,917.45 crore, with a 7% increase in revenue.
8.What role did the NCLT play in ITC’s demerger?
A. The NCLT approved the demerger, which allowed ITC to separate its hotel business into a new entity.
9.What is the significance of ITC Hotels becoming a separate entity?
A. ITC Hotels, now with a more focused capital structure, can chart its own growth path, potentially increasing shareholder value.
10.How has ITC balanced profit and revenue in FY25?
A. Despite a slight decline in sequential profit, ITC’s revenue has continued to grow, demonstrating resilience in its operations.
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