FMCG-to-cigarettes conglomerate ITC Ltd.'s spun-off hotels arm ITC Hotels will list on the bourses on Wednesday.
ITC decided to demerge its hotels business into a separate listed entity to unlock value for shareholders. The conglomerate fixed the demerger ratio at 1:10, which meant that shareholders holding 10 shares of ITC, as on January 6, 2025, would receive one share of ITC Hotels post the demerger.
Following the listing, ITC Hotels will be maintained in all the NSE and BSE indices at a constant price, and three business days following the listing. If the stock hits circuit limits, the exclusion will be postponed by two trading days each time.
According to Nuvama, the initial market price for ITC Hotels shares could range between Rs 150-175 per share.
ITC’s hotel business could attract premium valuation post listing vis-à-vis its current valuation under ITC, led by better price discovery in the market, said Sharekhan. The brokerage believed that the price discovery for ITC Hotels shares could be the range of Rs 150-170 per share.
Japanese brokerage Nomura believed that ITC Hotels would list within the Rs 200–300 per share range, which surpasses most estimates. As a result, the market-cap for the player could be between Rs 42,500 crore to Rs 62,200 crore, added the brokerage.
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On January 6, ITC's share price without the value of the hotels business was discovered at Rs 455 each, down Rs 27 from the previous session's closing price, following the special pre-open session for price discovery.
Under the scheme of demerger, ITC Hotels will issue equity shares directly to the shareholders of ITC in a manner that about 60 per cent stake is held directly by ITC shareholders proportionate to their shareholding in ITC and the remaining about 40 per cent stake to continue with ITC, it said.
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