ITC's demerger for hotel business underway; shares hit 52-week high; check details

livemint.com:

ITC Ltd rallied over three per cent to hit a 52-week high of ₹480.60 after media reports stated that the company's demerger process for its hotel business is now underway. According to CNBC-TV18, the cigarettes-to-hotel conglomerate will explore alternate structures for the hotel business. A separate listing of the hotels business is also one of the options considered, as per the report.

ITC said that alternate structures are being explored in-line with the industry dynamics, in response to a CNBC-TV18's queries. Shares of ITC surged after the newsbreak and gained over two per cent during the session at the time. The stock has risen 43 percent so far on a year-to-date basis after emerging as the top performing stock on the Nifty 50 index in 2022.

ITC's hotel business demerger has been cited as one of the key triggers for further potential upside on the stock by analysts. Last year, Chairman and Managing Director Sanjiv Puri told CNBC-TV18  that the demerger of the hotel business is ‘very much on the table’ following the recovery in the hospitality industry after Covid-19. "We will take it forward in line with industry recovery dynamics.

So all the indications now are that the industry is on a positive trajectory. So, that is where it stands, it's very much on the table," he said. Puri had also mentioned in September last year that the company will pursue an "asset-right" strategy for its hotels business to ensure that the diversified conglomerate remains competitive and contemporary, and continues to deliver superior performance.