ITC Hotels is set to make its stock market debut as a standalone entry on the NSE and BSE soon. As of the latest development, after the demerger from ITC, ITC Hotels has completed all necessary steps, from share allotment to price discovery, setting the stage for its official listing expected by mid-February 2025.
When is ITC Hotels expected to list?
Earlier, through an exchange filing on January 11, ITC said, “the Board of Directors of ITCHL at the meeting held today i.e., 11th January, 2025, has allotted 125,11,71,040 equity shares of Rs 1/- each to the shareholders of the Company as on the Record Date i.e., 6th January, 2025, pursuant to the Scheme of Arrangement amongst ITC Limited and ITCHL and their respective shareholders and creditors under Sections 230 to 232 read with the other applicable provisions of the Companies Act, 2013.”
As per the demerger scheme approved by the NCLT on December 16, 2024, ITC Hotels has 60 days to list its shares on the exchanges. This sets the deadline for listing no later than February 14.
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ITC Hotels: What price range can investors expect?
The ITC Hotels share price was determined during a special pre-open trading session which was held on January 6. This was the same day as the record and ex-date.
During this session, ITC’s share price on NSE and BSE adjusted. On NSE, it was adjusted by Rs 26 to Rs 455.60. Similarly, on BSE, ITC’s share price saw a Rs 27 adjustment to Rs 455.
Brokerages have shared varied predictions for ITC Hotels’ listing price such as Nomura anticipates the shares could list between Rs 200 to Rs 300. Nuvama expects a range of Rs 150 to Rs 175, while SBI Securities forecasts a price band of Rs 113 to Rs 170.
How were shares allotted to ITC shareholders?
Eligible shareholders of ITC have already received their ITC Hotels shares in their demat accounts.
However, these shares are currently marked as a “dummy ticket” and will remain frozen until the listing date. The allotment ratio was 1:10, meaning that 1 ITC Hotels share was allotted for every 10 ITC shares held as of the record date, January 6.
What is Nuvama’s Take on ITC – Near-term Concerns or Long-term Positives?
Revised target price and hotel demerger
Post the ITC hotel demerger, ITC’s share price saw a correction. The brokerage firm, Nuvama, estimated the market cap of ITC Hotels at Rs 420 billion. As per this estimate, this indicates a likely listing price of approx. Rs 200 per share.
Further, with ITC retaining a 40% stake in the hotels arm, the revised SotP-based target price for ITC is now Rs 571, which is down from Rs 585.
ITC: Q3FY25 expectations
As the Q3 season has kicked off, as per the brokerage firm estimation, ITC’s Q3FY25 revenue and EBITDA are likely to grow by 8% and 1% YoY. However, the FMCG business remains a drag, with profits projected to dip by 10% YoY despite modest sales growth of 3% YoY.
Other key positives include a recovery in the Agri business, strong dividend yield, and attractive valuations.
Despite near-term caution due to a weak FMCG segment, analysts maintain a ‘BUY’ rating on ITC, citing its strong Agri business recovery, attractive valuations, and consistent dividend yield.
ITC Hotels demerger: What impact does the demerger have on ITC?
The demerger of ITC Hotels came into effect on January 1. With the demerger complete, ITC Hotels now stands as a separate entity, focusing solely on its hospitality business.
Furthermore, ITC retains a 40% stake in the new company, with the remaining 60% distributed among existing ITC shareholders.
Post-demerger, ITC share price has seen an adjustment and its market capitalisation realigned.
ITC Hotels contributed 4.3% to ITC’s overall sales in FY24, with an EBIT contribution of 3.1% and an EBITDA margin of 34%.
As per NSE and BSE guidelines, ITC Hotels will temporarily become the 51st constituent of the Nifty50 and the 31st constituent of the Sensex.
After listing, ITC Hotels will remain part of indices for three trading days before being excluded, with the timeline extended if circuit limits are hit.
