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Shares of ITC Hotels, the demerged hotel business of FMCG giant ITC Ltd, are set to be listed on the stock exchanges today; Should you buy, sell or hold?
ITC Hotels Listing Today.
ITC Hotels Listing Today: Shares of ITC Hotels, the demerged hotel business of FMCG giant ITC Ltd, are set to be listed on the stock exchanges on Wednesday, January 29. The demerger, which came into effect on January 1, has paved the way for ITC Hotels to operate as a standalone entity and debut on the markets.
In a regulatory filing on Monday, January 27, ITC confirmed that ITC Hotels Limited (ITCHL) has received approval from the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) to list and trade its equity shares starting on January 29, 2025.
ITC Hotels Listing Details
ITC Hotels will officially list on both BSE and NSE on January 29, with trading set to begin at 9:15 AM. A special pre-open session was held on January 6 to adjust the share price post-demerger. On the NSE, ITC’s share price was reduced by Rs 26 to Rs 455.60, while on the BSE, the adjustment was Rs 27, bringing the price to Rs 455 per share.
ITC Hotels Share Allotment
ITC Hotels has allotted 1,25,11,71,040 equity shares of Rs 1 each to ITC shareholders as of January 6, the record date. The allotment was made at a ratio of one fully paid-up share of ITC Hotels for every 10 fully paid-up shares of ITC.
For example, if a shareholder owned 1,000 ITC shares at Rs 400 per share before the demerger, the total cost of acquisition would be Rs 4,00,000. After the demerger, they would receive 100 shares of ITC Hotels. The cost of acquisition would be split, with Rs 3,45,960 (86.49%) attributed to ITC shares and Rs 54,040 (13.51%) to ITC Hotels shares.
ITC Hotels Expected Listing Price
There is uncertainty surrounding the listing price of ITC Hotels, with analysts predicting a range between Rs 113 and Rs 170 per share. Market sentiment and global factors will likely influence the final price, so investors are advised to await further details at the opening bell.
Brokerage Views
Brokerage firms have varying views on ITC Hotels. ICICI Direct expects the company to benefit from a favorable demand-supply dynamic in the hospitality sector, projecting a price target of Rs 195 per share, offering potential upside of 15-30% from an expected listing price of Rs 150-170.
Nuvama, on the other hand, estimates the hotel business market cap at Rs 42,000 crore post-demerger, suggesting a likely price of Rs 200 per share, after applying a holdco discount of 20%. Nomura forecasts a range of Rs 200-300, while SBI Securities expects a price band of Rs 113-170.
Will ITC Hotels List On BSE, NSE
Though ITC is a key player in the benchmark indices, ITC Hotels will only be part of them for three trading days. It will be excluded from the indices after that period unless its stock hits circuit limits during this time.
ITC Hotels Demerger
The demerger process, finalized on January 1, 2025, allows ITC Hotels to focus exclusively on its hospitality business while ITC retains a 40% stake in the company. The remaining 60% is distributed among ITC’s shareholders.
Impact on ITC’s Market Capitalisation
Following the demerger, ITC shareholders now hold stakes in two separate entities, each focused on different business segments. The reorganization of ITC’s market capitalisation reflects this realignment.
Apportionment of Acquisition Cost
To clarify the impact of the demerger, ITC provided an example. For a shareholder with 1,000 ITC shares purchased at Rs 400 each, the total cost of acquisition would be Rs 4,00,000. After the demerger, 86.49% (Rs 3,45,960) of this cost would be associated with ITC shares, and 13.51% (Rs 54,040) would apply to ITC Hotels shares.
ITC later updated this example in a filing, confirming that the correct cost of acquisition for 100 ITC Hotels shares should be Rs 54,040, not Rs 50,040 as previously stated.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
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