ITC clarifies it won't buy stake in hotels if BAT wants an exit after demerger

Kolkata-based FMCG major ITC has told analysts that it won't be a buyer in case a large shareholder like BAT wants to exit the hotels business following its demerger into a new subsidiary.

The restructuring exercise has met a long-pending demand of investors to unlock value in matured businesses but the decision to keep 40% stake with the parent entity had raised eyebrows.

If an investor owns a 10% stake in ITC, post-demerger, they shall hold a 6% stake in ITC Hotels and a 4% stake in ITC Hotels indirectly via ITC Ltd.

The world's largest tobacco company, British American Tobacco (BAT) which owns 29% stake in ITC, would end up owning about 17.4% stake in ITC Hotels after the demerger. It is being speculated that BAT may have little interest in owning a hospitality stock in its portfolio.