Demerger to boost ITC's cash flows, create India's 2nd biggest hotel group

The planned demerger of ITC’s hotel division into an independent listed company marks the end of an era for the tobacco and fast-moving consumer goods (FMCG) giant. The company had merged the erstwhile listed ITC Hotels with itself in April 2005 to create a diversified and vertically integrated conglomerate with leading presence in tobacco, personal care, ready to eat foods, paper & packaging, food & agri products and hotels. Prior to it, the company had merged ITC Bhadrachalam Paperboards with itself in April 2002.

The demerger signals a reversal in ITC’s historical growth strategy of using the cash flows generated