Teaching Notes: ITC Hotels demerger: unlocking value through strategic restructuring

In mid-2023, Reyansh, a fund manager at an Indian investment firm, is assessing the audacious proposal by ITC Limited to spin off its Hotels division into a standalone company called ITC Hotels Ltd. The case is set in July 2023–June 6 2024, with ITC – the Indian multi-sector conglomerate involved in cigarettes, fast-moving consumer goods (FMCG), hotels, agri-business and paper – in-principle announcing board and shareholders’ approval for the demerger of its Hotels business. The protagonist needs to determine whether or not this restructuring will actually unlock shareholder value or run the risk of destroying the value of the conglomerate...