As the stock turned ex-date for the hotel industry demerger, ITC Ltd shares were trading at Rs 452 a share on Monday morning. The stock's previous closing price of Rs 482 on the BSE was reduced by Rs 27. This contrasts with the Rs 16–25 per share modifications that some analysts had previously anticipated.
Like Piramal Pharma, NMDC Steel, and Jio Financial Services Ltd. (JFS), ITC Hotels' shares will soon float on stock exchanges, perhaps in February.
In fact, ITC Hotels would not trade in real time, even though it would be shown as the 51st element of the Nifty50 and the 31st constituent of the Sensex and would be taken into account in the weight computations of the indices.
Therefore, ITC Hotels' pricing of Rs 27 will not change till the stock is listed. The demerger's record date is today, and ITC stockholders who currently hold 10 ITC shares will be eligible to receive one ITC Hotels share, as well as a subsequent ratio.
ITC Hotel's live market capitalization would be taken into account to determine weight in the indices when it was listed for three trading days. The debut market price of ITC Hotels' shares was primarily anticipated by analysts to be between Rs 150 and Rs 195 per share.
There won't be a significant increase in value for ITC shareholders because the holding company discount has been factored into the ITC price adjustment. Nevertheless, ITC investors will have the chance to take part directly in the hotel company's growing story.
Given the strong industry tailwinds and ITC Hotels' solid pipeline of major additions, we think ITC Hotels Ltd. has a chance to beat ITC Ltd. in the medium to long run. A small number of shareholders (particularly ETFs) may be forced to leave ITC Hotels Ltd. in the near future, which could put pressure on the stock price, the brokerage stated on December 30, 2024.
According to SBI Securities, any short-term pressure on ITC Hotels Ltd.'s stock price will present a favorable chance for retail and HNI shareholders to build up a solid portfolio of long-term investments.
"In the meantime, investors can hold onto ITC Ltd. shares for a long time after the demerger because of its diverse FMCG portfolio and consistent growth in its core businesses (FMCG and cigarettes)." Additionally, the demerger of its asset-heavy hotel industry will boost cash flows and return ratios. We estimate that ITC Ltd's medium-term fair value after the demerger will be between Rs 525 and Rs 550," it stated.
ICICIdirect set a target price of Rs 195 for ITC Hotels shares, indicating a possible upside of 15–30% over its anticipated listing price of Rs 150–170. The company described the demerger of ITC's hotel division as a win-win for shareholders. ITC shares are valued at Rs 555 by the brokerage.
