ITC Hotels demerger: ITC share price discovered at ₹455.60 on NSE

The demerger of ITC Hotels from parent ITC took place today and the spun off entity got listed as the 51st stock on Nifty 50 and 31st constituent in Sensex. The ITC Hotels shares have been temporarily added to the bourses until it gets listed on the exchanges at a later date. It will not be traded live and its market capitalisation and price will remain constant until its official listing on the domestic bourses.

The stock exchanges, BSE and NSE, conducted a special pre-open session for ITC shares for one hour from 9 am to 10 am, to discover the stock price of the ex-demerged entity. The new share price of ITC ex-ITC Hotels was adjusted by ₹26 or 5.4% at ₹455.60 on NSE and by ₹27 or 5.6% at ₹455 on BSE.

The ITC Hotels share price was derived based on the difference between ITC's last closing price of ₹482 on January 3 and the price discovered during the SPOS (special pre-open session) today. The ITC share price settled at ₹469 apiece in the special pre-open session, down 2.7% over the previous closing price. After resuming normal trading at 10 am, ITC shares gained 1.1% to ₹460.40 on the BSE, while it hit a high of ₹460.35 on the NSE. The market capitalisation of the conglomerate stood at ₹5.72 lakh crore at the time of reporting.

The price discovery of ITC was in line with Street expectations as domestic brokerage house Nuvama expected a ₹22-25 per share adjustment for the hotel business. “On January 6, 2025, the ex-date for the demerger, ITC's share price is expected to be adjusted by ₹22-25, reflecting its 40% stake in the hotel business and incorporating a 20% holding discount. The adjustment is expected to be ₹18 per share,” the brokerage had predicted.

Under the scheme of demerger, shareholders will get one ITC Hotels share for every 10 ITC shares they own, with the cigarettes-to-FMCG-to-hotels conglomerate retaining a 40% stake in the newly demerged listed entity. British American Tobacco (BAT), which owns 25% stake in ITC, is expected to get 15% stake in the hotel business, while the balance shareholding will be distributed among existing shareholders in proportion to their holdings in the company.

As of now, ITC has not announced the date of listing of ITC Hotels and it may take few weeks’ time to get all the listing approvals. According to foreign brokerage Nomura, ITC Hotels’ shares may list in the ₹200-300 range, with a market capitalisation of around ₹42,500-62,000 crore. Nuvama anticipates that the initial market price for ITC Hotels shares to be range between ₹150-175 per share, while SBI Securities pegged price range of ₹113-170 per share.

Among the prominent recent demergers, Jio Financial was spun off from parent Reliance Industries and post record date it took almost 33 days for the listing. While Piramal Pharma took almost 45 days for the listing after it got demerged from Piramal Enterprises, NMDC Steel took nearly 4 months for the listing after it was demerged from NMDC Ltd.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)