ITC Hotels demerge
ITC Hotels demerge – The highly anticipated listing of ITC Hotels, which has been demerged from ITC Ltd, is scheduled to take place during a special pre-open session on January 6. Market analysts are predicting a listing price ranging from Rs 150 to Rs 300 per share.
The price discovery process will be based on the difference between ITC Ltd’s closing price on January 3 and the opening price set during the pre-open session on January 6. On Friday, ITC shares closed at Rs 483.95, marking a 1.04 percent decrease on the NSE.
Nuvama, a brokerage firm, has estimated that ITC Hotels shares could be valued between Rs 150 and Rs 175 per share at listing. This valuation takes into account a Rs 22-25 adjustment on the ex-date, reflecting ITC’s 40 percent stake in the hotel business and a 20 percent holding discount.
On the other hand, Nomura, a Japanese brokerage, has provided a more optimistic estimate, suggesting a likely listing range of Rs 200-300 per share. This projection implies a market capitalization of Rs 42,500 crore to Rs 62,200 crore for ITC Hotels, highlighting its potential as a standalone entity.
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Following the listing, ITC Hotels is expected to attract a premium valuation due to improved price discovery in the market, according to Nuvama analysts. However, they have warned about a potential supply overhang, with major shareholders like BAT (15% stake) and SUTTI (5% stake) possibly divesting their positions.
Under the demerger scheme, ITC Hotels will issue equity shares directly to ITC shareholders, with approximately 60 percent of the stake held by ITC shareholders in proportion to their existing shareholding in ITC. The remaining 40 percent stake will be retained by ITC.
Established in 1975, ITC Hotels is recognized as one of India’s leading luxury hospitality brands. With a portfolio exceeding 140 hotels across 90-plus locations, it has carved a niche in the hospitality sector over nearly five decades.
Trading of ITC Hotels shares will begin after the formal listing on the stock exchanges. ITC Ltd has confirmed that the listing process will be finalized within 60 days of receiving the NCLT order on December 16, 2024.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.