ITC Hotels currently has more than 120 hotels in over 70 destinations across six distinct brands. Credit:. KuMaR437 via Shutterstock.com.

Indian conglomerate company ITC’s board has given in-principle approval for the demerger of its hotels business, under a scheme of arrangement, ET Hospitality World reported.

If the demerger gets final approval from the board on 14 August, the new entity will be named ITC Hotels Ltd and will handle ITC’s hotels and hospitality business.

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In a stock exchange filing, the company stated: “Appropriate announcements and public disclosures in accordance with the SEBI Listing Regulations and other applicable laws will be made as necessary.”

ITC will approximately hold a 40% stake in the new entity and the remaining will be held by its shareholders.

The company’s board noted that its hotel business grew over the years and is well poised to chart its own growth trajectory as a separate entity.

ITC chairman Sanjiv Puri said: “Creation of a hospitality-focused entity will engender the next horizon of growth and value creation by harnessing the exciting opportunities in the Indian hospitality industry.

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“In the proposed reorganisation, both ITC and the new entity will continue to benefit from institutional synergies.”

At present, ITC Hotels, which was launched in 1975, has more than 120 hotels in over 70 destinations across six distinct brands, including ITC Hotels, Mementos by ITC Hotels, Welcomhotel, Storii by ITC Hotels, Fortune Park Hotels and WelcomHeritage Hotels.

As per the company’s recently published FY2022-23 financial report, the gross revenue of the company grew by 17.6% to Rs694.8bn ($8.47bn), compared with Rs591.01bn ($7.2bn) recorded in the previous year.