The National Company Law Tribunal has approved ITC’s plan to demerge its hotel business, according to an exchange filing.

The demerger scheme will be effective on the first day of the following month after the filing of a certified copy of the NCLT order with the Registrar of Companies, Bengal, and fulfilling other conditions, ITC said.

“The company will advise the effective date to the stock exchanges in due course.”

The cigarettes-to-staples company announced its plans to demerge its hotel business in August 2023 into a separate entity. Under this demerger scheme, ITC will maintain 40 per cent ownership of ITC Hotels, with ITC shareholders acquiring the remaining 60 per cent in proportion to their stake in the parent entity.

ITC shareholders approved the demerger in June. The resolution for the approval of the scheme of arrangement among ITC, ITC Hotels, and their respective shareholders and creditors for the proposed demerger of the hotel business was passed with the requisite majority.

Investors, including the government-backed institutions, participated and voted in favour of the demerger. The voting comes after the demerger move was opposed by a domestic proxy advisory firm, Institutional Investor Advisory Services.

The Competition Commission of India also cleared the proposed combination in May.