The demerger of ITC according to Pankaj Pandey, Head Research, is a disappointment, as a vertical split would have been better. He believes that although the new arrangement will see the hotel business contribute over Rs 25, this will not matter much. However, ITC still owns 40% of the demerged business and may require funding going forward.
ITC demerger: The proposed transaction is subject to final approvals from the board of directors and committees in a meeting to be convened on August 14 at 4.30 pm.
Shares of ITC extended their recent fall to the third straight session on Tuesday. The stock fell over 3% to hit an intraday low of Rs 455.40 on NSE. The slump comes after the FMCG major announced the much-awaited demerger of its hotels business under a scheme of arrangement. Watch this Visual Story to see if what this demerger means for shareholders. Also, check ITC Hotels expected share price, ITC share price target, and more.
Shares of ITC crashed 6 per cent from day's high to Rs 469.60 during the day, following the announcement of demerger, and mcap slipped below Rs 6 lakh crore mark.