Oriental Hotels shares jump over 5% as firm to merge with Indian Hotels Company

Shares of Oriental Hotels rallied as much as 5.43% to a high of ₹146.20 apiece on the NSE in the opening deals on Monday, August 24, as the company informed stock exchanges that The Indian Hotels Company Limited (IHCL), India’s largest hospitality company, announced that the former will be merged with IHCL through a scheme of arrangement.

The scheme is subject to statutory approvals and clearances.

Puneet Chhatwal, Managing Director & Chief Executive Officer, IHCL said, “In line with our Accelerate 2030 strategy of creating value, simplifying the group’s holding structure and unlocking the full potential of OHL portfolio including iconic assets like Taj Coromandel, Chennai, Taj Fisherman’s Cove Resort & Spa, Chennai and Taj Malabar Resort & Spa, Cochin, the Boards of IHCL and OHL have today approved this merger.”

Chhatwal added, “The merger will drive long-term value creation by leveraging IHCL’s strong balance sheet to support strategic investments, including inventory expansion and product enhancements further strengthening the premium positioning of the portfolio.”

At 10:36 AM, shares of IHCL traded 0.23% higher at ₹731.65 apiece on the NSE. The stock gained as much as 0.5% to a high of ₹733.65 on the NSE.

What you need to know

Oriental Hotels Limited is an associate company of The Indian Hotels Company Limited.

Key detail to know here

An associate company is a company in which another company has significant influence, but does not have control.

In the IHCL–Oriental Hotels case, the relationship is important because Oriental Hotels (OHL) is an associate of Indian Hotels Company (IHCL).

So how does the merger work?

The announcement means OHL will be absorbed into IHCL through a Scheme of Arrangement, subject to regulatory and shareholder approvals.

Merger announcement details

Oriental Hotels has a portfolio of seven hotels with 825 rooms. This includes freehold assets: Taj Coromandel -Chennai, Taj Fisherman’s Cove Resort & Spa - Chennai and Gateway Coonoor, and long tenure leasehold assets: Taj Malabar Resort & Spa - Cochin, Vivanta Coimbatore, Vivanta Mangalore and Gateway Madurai.

Additionally, OHL has strategic investments in several IHCL group hotel companies in India and internationally including St. James Court, TAL Hotels and Resorts Ltd, Lanka Island Resorts Ltd, Taj Madurai Ltd and Taj Karnataka Hotels and Resorts Ltd.

What Oriental Hotels CEO said

Pramod Ranjan, Managing Director & CEO, Oriental Hotels Ltd. said, “IHCL, India’s largest hospitality ecosystem, has built a resilient and diversified business model anchored by a strong brandscape that caters to the country’s diverse travel needs. The company has delivered seventeen consecutive quarters of record performance, achieving fourfold portfolio growth, sustained double-digit increase in revenue and profitability, and strong return on capital employed. The merger of OHL with IHCL will create significant value for OHL shareholders, enabling them to now participate directly in IHCL’s growth journey.”

Transaction Advisors

For IHCL, PwC Business Consulting Services LLP acted as the Registered Valuer, undertaking the valuation exercise and recommending the share exchange ratio. Kotak Mahindra Capital Company Limited provided the Fairness Opinion, while Cyril Amarchand Mangaldas served as legal counsel.

On behalf of OHL, SSPA & Co., Chartered Accountants acted as the Registered Valuer, undertaking the valuation exercise and recommending the share exchange ratio. Motilal Oswal Investment Advisors Limited provided the Fairness Opinion, and Kochhar & Co. acted as legal counsel.

Details shareholders need to know

As of March 31, 2026, the revenue and net worth (on an audited standalone basis) of the Transferor Company and the Transferee Company are as hereunder:

Amalgamation details

Upon the scheme becoming effective and in consideration of the amalgamation, Transferee Company shall allot equity shares, credited as fully paid-up to the members of Transferor Company, holding fully paid up equity shares in Transferor Company and whose names appear in the register of members of Transferor Company (other than Transferee Company and/or its subsidiaries) on the Record Date (as defined in the Scheme) in the following manner:

“25 equity shares in the Transferee Company of the face value of ₹1 each (credited as fully paid up) for every 117 equity shares of the face value of ₹1 each fully paid-up held by such member in the Transferor Company” (the “Share Exchange Ratio”).

The existing shareholding of the Transferee Company and its subsidiaries in the Transferor Company shall stand cancelled and extinguished without any further act, instrument or deed immediately following the issuance of the equity shares in accordance with the above.

Transferor Company and Transferee Company

In a merger, the Transferor Company is the company whose business, assets, liabilities and operations are transferred to another company, while the Transferee Company is the company that receives and absorbs these assets and liabilities.

In the proposed Oriental Hotels–Indian Hotels Company merger, Oriental Hotels is the Transferor Company, while IHCL is the Transferee Company. Once the scheme becomes effective after the required approvals, Oriental Hotels will be merged into IHCL and cease to exist as a separate legal entity.