The record date for the ITC Hotels demerger was 6 January 2025 and this was the day that fixed which ITC shareholders would receive shares in the new hotels company. Many investors saw that date as the main event, but it was the last step of a process that had started much earlier.
The record date merely established who would receive the shares. The checks on the scheme had been carried out beforehand, following SEBI is the statutory regulator of India's securities market, with the legal duty to protect investors and to promote and regulate that market. Read the full meaning of SEBI scheme‑of‑arrangement rules that are set out in its master circular dated 20 June 2023.
An investor holding a certain share of ITC will therefore hold the same share of the new company.
The route from draft scheme to NCLT
The series starts when the listed company files its draft scheme with the stock exchanges under Regulation 37 of the SEBI Listing Regulations 2015. The firm cannot approach the NCLT until the exchanges issue an observation letter, which is also called a no‑objection letter.
Once the filing is made, the company must put the draft scheme up on its website right away. The observation letter from the exchanges has to be posted on the site within 24 hours of getting it, so that shareholders can read both the documents.
Only after this stage does the scheme go to the NCLT, where it is dealt with under sections 230 to 234 of the Companies Act.
Alongside this, the company pays the stock exchanges a fee of 0.1% of paid-up share capital. The capital taken is that of whichever company has the highest figure among the listed, transferee or resulting companies.
Checks built in for shareholders
Before a draft scheme reaches the exchanges for approval, the listed company has to submit a valuation report from a SEBI-registered valuer. The audit committee reviews this report before recommending the draft scheme.
The audit committee also prepares its own report, which covers the need for the scheme, its rationale, its synergies, the impact on shareholders and a cost-benefit analysis. In addition, company obtains a fairness opinion from a SEBI-registered merchant banker on the valuation of the assets or shares.
