INTERNATIONAL JOURNAL OF ENGINEERING MANAGEMENT AND
SOCIAL SCIENCES

Value Creation Through Corporate Restructuring: A Study on the Demerger of ITC Hotels Limited from ITC Limited

Corporate restructuring has become an important strategic tool for organizations seeking to enhance operational efficiency, improve resource allocation, and maximize shareholder value. This study examines value creation through the demerger of ITC Hotels Limited from ITC Limited, one of the most significant corporate restructuring initiatives in India. The primary objective is to evaluate whether the demerger has contributed to unlocking shareholder value and improving the financial performance of both entities. The study analyses key financial indicators, including profitability, liquidity, solvency, and market performance, using secondary data obtained from annual reports, stock exchange filings, and other published sources. Comparative analysis of the pre- and post-demerger periods is undertaken to assess the impact of the restructuring on corporate value creation. The research also explores the strategic rationale behind the demerger, including increased managerial focus, operational independence, and enhanced business efficiency. Appropriate statistical tools are employed to test the significance of changes in selected financial variables. The findings are expected to provide insights into the effectiveness of corporate demergers as a value creation strategy and their influence on shareholder wealth. The study contributes to the growing body of knowledge on corporate restructuring in India and offers practical implications for corporate managers, investors, policymakers, and researchers interested in strategic financial decisions and sustainable business growth.