The board of directors of Oriental Hotels Ltd (OHL) has approved a scheme of arrangement for the amalgamation of the company with The Indian Hotels Company Ltd (IHCL), subject to requisite regulatory, shareholder and creditor approvals.
Board approves amalgamation
The approval was given at OHL’s board meeting on August 24, 2026, based on the recommendations of the audit committee and the committee of independent directors.
Under the proposed scheme, Oriental Hotels, the transferor company, will be amalgamated into and with IHCL, the transferee company. The scheme has been proposed under Sections 230 to 232 of the Companies Act, 2013.
The transaction remains subject to the sanction of the relevant bench of the National Company Law Tribunal (NCLT), requisite approvals of shareholders and/or creditors of OHL and IHCL, as applicable, and other regulatory and statutory approvals, including those from the stock exchanges and Securities and Exchange Board of India (SEBI).
₹500.7 crore revenue for OHL
As of March 31, 2026, Oriental Hotels reported standalone revenue of ₹500.7 crore and net worth of ₹480.5 crore.
IHCL, meanwhile, reported standalone revenue of ₹5,640.16 crore and net worth of ₹12,766.95 crore for the same period.
Oriental Hotels is primarily engaged in owning, operating and managing hotels and hospitality businesses, while IHCL operates hotels, palaces and resorts and also has the ability to acquire and hold shares in companies with similar or complementary objectives.
Share exchange ratio
Under the proposed scheme, shareholders of Oriental Hotels, other than IHCL and/or its subsidiaries, will receive 25 equity shares of IHCL for every 117 fully paid-up equity shares of Oriental Hotels held on the record date.
The IHCL shares will be issued as fully paid-up equity shares of ₹1 each. The existing shareholding of IHCL and its subsidiaries in Oriental Hotels will be cancelled and extinguished following the issue of the consideration shares.
Valuation based on independent reports
The transaction is a related party transaction as IHCL is the promoter of Oriental Hotels. As of June 30, 2026, IHCL held 37.05% of OHL’s equity share capital, directly and indirectly through its subsidiaries.
The company said the consideration under the scheme would be discharged on an arm’s-length basis. The share exchange ratio is based on a joint valuation report dated August 23, 2026, issued by SSPA & Co. and PwC Business Consulting Services LLP.
Motilal Oswal Investment Advisors Ltd, an independent SEBI-registered Category I merchant banker, has also provided a fairness opinion on the valuation.
Synergies across South India
The proposed amalgamation is expected to create synergies between the two businesses, particularly as Oriental Hotels has a significant presence in Tamil Nadu, Kerala and Karnataka.
According to the company, becoming part of the larger IHCL entity would provide OHL’s business access to IHCL’s financial resources, management experience and expertise. It would also facilitate operational and cost synergies, asset management opportunities, rationalisation, standardisation and simplification of business processes.
The merger is also aligned with IHCL’s strategy of reducing the number of operating entities under its holding structure. This is expected to simplify the management structure, reduce duplication and rationalise administrative expenses.
Public shareholders to receive IHCL shares
The scheme will provide shareholders of Oriental Hotels an opportunity to participate directly in the consolidated hospitality business of IHCL through the consideration shares.
The company said the amalgamation would also enable full accounting consolidation and joint utilisation of financial resources available within the two companies, along with standardisation of accounting policies and practices.
Following the scheme, Oriental Hotels will cease to have a separate shareholding structure. IHCL’s promoter and promoter group holding is expected to decline from 38.12% to 37.50%, while its public shareholding is expected to rise from 61.88% to 62.50%, based on the indicative post-scheme structure.