ITC Hotels' Rs 1,500-Crore Demerger Windfall To Strengthen 'Own Space' Portfolio

The newly listed ITC Hotels Ltd.—the demerged hotels business of ITC Ltd.— eyes expanding its 'own space' portfolio with its Rs 1,500 crore liquidity boost from the demerger with its parent, according to its top executives.

The liquidity will drive growth aspiration over the next two to three years, Chairman Sanjiv Puri told NDTV Profit. The hospitality industry is accelerating, he said, aiming to be "ready to invest when the right opportunity presents itself."

The hotels business of the consumer giant currently owns 45% inventory in 'own space' and 55% in 'managed space', Anil Chadha, managing director of ITC Hotels told NDTV Profit. "As we expand, hope to have a 35% inventory in managed side, and 65% in own space," Chadha said.

ITC Hotels has over 140 hotels in 90 odd destinations across six brands. Out of these, some properties are owned by ITC and some are managed in partnership with the original owners like ITC Rajputana.

The hospitality firm is opening one hotel every month right now, Puri said while eyeing to have 200 hotels by 2030. "But, hope to exceed that number."

Demerging the hotels arm makes ITC Hotels India's second largest hotels chain with 140 hotels and 12,965 keys (rooms), including 28 hotels opened with 1,642 keys in the last 24 months.

On the parent's third-quarter earnings, Puri said that the consumer giant will "deliver competitively superior results and deliver value for all stakeholders."

Shares of ITC Hotels were listed at a discount of 30.4% on Wednesday at Rs 188 per share on the BSE, against the implied price of Rs 270 per share. On the National Stock Exchange, the shares debuted at a 30.7% discount at Rs 180 per share.

At the end of 6 months to September 2024, the hotels business had a revenue of Rs 1,450 crore and profit before interest and tax of Rs 304 crore. The company has very negligible debt on its books and estimated profit after tax for the same period is at Rs 222 crore, assuming a tax rate of 27%.