The much-anticipated listing of ITC Hotels Limited (ITCHL) shares is set to take place on January 29, 2025, following the demerger of ITC Limited’s hotel business. The National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) have confirmed the listing date, marking a significant milestone for ITC shareholders who have been eagerly awaiting the spin-off since the demerger came into effect on January 1, 2025.
Key Details of ITC Hotels Listing
ITC Limited, the FMCG conglomerate, announced that ITC Hotels Limited has allotted 1,25,11,71,040 equity shares of Re 1 each to its shareholders. These shares were distributed in the ratio of one ITC Hotels share for every 10 ordinary shares held in ITC Limited as of the record date, January 6, 2025. Post-demerger, the issued, subscribed, and paid-up equity capital of ITC Hotels stands at Rs 2,08,11,71,040, comprising 2,08,11,71,040 equity shares.
The stock will be listed under the T Group of Securities and will be placed in the Trade-for-Trade segment for the first 10 trading days. Additionally, the scrip will be part of a special pre-open session for IPOs and other categories as per SEBI regulations.
ITC Hotels Share Price Expectations
Brokerage firm Nuvama estimates that the market capitalization of ITC Hotels could be around Rs 42,000 crore, implying a likely share price of Rs 200. Nomura, another brokerage, predicts a broader range of Rs 200 to Rs 300 for the stock on listing. The market cap of ITC Hotels is expected to fall between Rs 42,500 crore and Rs 60,000 crore.
On the demerger record date (January 6, 2025), the share price of ITC Limited adjusted by Rs 27 on the BSE (closing at Rs 455) and by Rs 26 on the NSE (closing at Rs 455.60). This adjustment reflects the market’s anticipation of the demerger and the value unlocking for shareholders.
Apportionment of Cost of Acquisition
ITC Limited has provided guidance on how shareholders can apportion the cost of acquisition between ITC shares and ITC Hotels shares. For example, if a shareholder purchased 1,000 ordinary shares of ITC at Rs 400 per share, the total cost of acquisition would be Rs 4,00,000. Post-demerger, this cost would be split as follows:
- ITC Limited: 86.49% of the total cost (Rs 3,45,960)
- ITC Hotels Limited: 13.51% of the total cost (Rs 50,040)
This apportionment ensures clarity for shareholders regarding the tax implications and valuation of their holdings.
Holdco Discount and Valuation
Nuvama has applied a 20% holding company (holdco) discount to ITC’s 40% stake in ITC Hotels, revising its sum-of-the-parts (SotP) based target price for ITC Limited to Rs 571 (from Rs 585 earlier). The firm maintains a ‘BUY’ rating on ITC, citing the demerger as a value-unlocking event for shareholders.
Ownership Structure
Post-listing, ITC Limited will retain a 39.88% stake in ITC Hotels, while the remaining 60.12% will be held by public shareholders. This structure ensures that ITC Hotels operates as an independent entity while maintaining a strategic link with its parent company.
Conclusion
The listing of ITC Hotels marks a new chapter for ITC Limited and its shareholders. With a projected market cap of Rs 42,000 crore and an expected share price of Rs 200, the demerger is poised to unlock significant value. Investors will be closely watching the stock’s performance on January 29, as ITC Hotels begins its journey as an independent entity on the NSE and BSE.