Hello friends!
Today I'll discuss about ITC share. ITC which is usually considered a safe bet by analysts. It is one of the favourite share for investors because of its good returns. Today ITC is a big news because ITC Ltd has announced the much-awaited demerger of its hotels business yesterday under a scheme of arrangements. But this news came as a negative surprise for market participants, share down by 8% today. Beacuse it's not a clear demerger, Because company announced that company will continue to hold a 40% stake in it And the rest will be distributed among existing shareholders proportionate to their stake in ITC.
About ITC company:
ITC is an indian conglomerate company established in 1910, headquarter in Kolkata. ITC limited is a diversified conglomerate with business spanning FMCG, personal care, cigarettes and cigars, education and stationary products, incense products and safety matches, Hotels, paperboard and packaging, agribusiness and information technology. Company has 13 business in 5 segments. It exports its product in 90 countries. This diversification has proven to be a pillar of strength for the company.
As of june 30 , ITC operates 120 hotels across 70 different locations, totalling 11500 rooms. The company manage 6 hotel brands catering to different price point.
According to Jefferies, ITC's hotel revenue has grown at a 12% CAGR from financial year 2019 to financial year 2023. CAGR Or compounded annual growth rate is the rate at which revenue increase every year.
Global research and broking firm Morgan Stanley saw that demerger of the hotel business as a clear positive for ITC . According to the firm it should allay concerns over capital allocation and use of cigarettes business cashflows to develop other businesses over the medium to long term.
Morgan Stanley also believe that the decision can help ITC's hotels business in charting its own growth path.
After all studies i decided to hold my share in ITC. Let's see what happened. You take your decision with your study.
ITC will hold a meeting of the borad of directors of the company on 14th August 2023. Till we have to wait and watch 😄