ITC shares gain on ex-dividend day amid reports of hotels demerger proposal

Shares of ITC rose over 2% in intraday day trade on Tuesday at Rs 449.85 apiece on NSE. The shares have been on a continuous upward trend for the last few months and hit multiple record highs during this period. The scrip has gained over 35% this year and is the top performer in the Nifty pack.

The stock hit a record high on Monday, crossing Rs 450 for the first time.

The proposal to demerge the hotel business was a long-standing one for the company but it was put on hold as the pandemic dealt a severe blow to the hotel industry overall.

With a strong recovery in the business in the past year, driven by post-Covid pent-up demand the company has once again brought back the proposal forward.

In the fourth quarter, the hotel business of the conglomerate recorded bumper revenue growth of 99% to Rs 809 crore and posted a profit (before tax) of Rs 205 crore against a loss of 29 crore in the previous-year quarter.

ITC shares were also trading ex-dividend on Tuesday with respect to the special dividend and final dividend announced along with the March quarter results.

The Board has recommended a final dividend of Rs 6.75 and a special dividend of Rs 2.75 per equity share. The dividend, if approved by shareholders at the AGM, will be paid between August 14 and 17 to eligible members.

The company has fixed May 30 as the record date to determine the eligibility of shareholders.

Together with the interim dividend of Rs 6 per share, the FMCG major would pay a total dividend of Rs 15.50 for the financial year 2022-2023.

In the past 12 months, ITC has declared an equity dividend amounting to Rs 6 per share, which results in a dividend yield of 1.35%.

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