The shareholders of ITC Ltd overwhelmingly backed the resolution to demerge the hotels business into a separate entity, paving the way for the eventual listing of ITC Hotels Ltd in “6-8 months” down the line.

More than 99.5 per cent of the votes polled in the court-convened meeting favoured the scheme of arrangement, rebuffing calls from a section of investment advisers to vote against the resolution.

The outcome of the voting showed that 82.62 per cent of the outstanding share of ITC were polled and 99.59 per cent of those votes were cast in favour.

ITC does not have any identified promoter group. The major public shareholders include British American Tobacco (BAT), Life Insurance Company of India and Specified Undertaking of Unit Trust of India (SUUTI) holding 25.49 per cent, 15.19 per cent and 7.81 per cent, respectively.

During the virtual meet, ordinary shareholders who spoke at the meeting backed the resolution even as a few spoke of the social media messages that had urged them to vote against the resolution. Many of them were keen to know how many shares they would get of the new entity, ITC Hotels, and when the new company would be listed on the bourses.

Responding to shareholders’ queries, Sanjiv Puri, chairman and managing director of ITC Ltd, said the entire process could take six to eight more months, indicating a listing at the end of 2024 or early next year.

“There are more steps in the process that have to be crossed,” Puri said. The scheme of arrangement has received approvals from the bourses, Sebi and the Competition Commission of India (CCI), while the nod from National Company Law Tribunal and the Registrar of Companies would be sought after the shareholders’ meeting on Thursday.

Shareholders were also informed, once again, that they would get one share of ITC Hotels for every 10 shares held in ITC Ltd even though existing shareholders would continue to own 100 per cent economic interest in ITC Hotels, 40 per cent through ITC Ltd and 60 per cent directly.

Asked about the role of BAT in the demerged entity, Puri said ITC Hotels would be a board managed company.

During his initial remarks, Puri defended the structure which had come under scrutiny when it was first announced in August of 2023.

“The proposed scheme of arrangement provides the hotels business the required flexibility and opportunity to craft a path aligned to the remarkable growth of the industry while continuing to leverage ITC’s institutional strengths, brand equity and goodwill,” Puri said.

Shareholders were informed that ITC Hotels would kick off an independent journey on a solid financial base, packing ammunition for growth.

“ITC Hotels will have a strong debt free balance sheet with a net worth of nearly ₹10,000 crore, which it can leverage to raise capital from debt or equity markets going forward should such a need arise. The proposed structure has also been designed to enable both the entities to benefit from strong cross synergies,” Puri told the shareholders.

It is not that ITC Hotels will only benefit from the structure, the parent will also stand to gain, he added. ITC Ltd will continue to benefit from the cuisine knowledge of ITC Hotels in creating “differentiated, high quality branded food products, including food tech creations”.