ITC share price adjusts by Rs 26 on NSE as stock trades ex-demerger of hotels biz

At the end of a special pre-open trading session for the price discovery of the demerged entity ITC Hotels, shares of parent firm ITC Ltd were adjusted by Rs 26 on NSE and Rs 27 on BSE. Stock exchanges BSE and NSE organized a special session for ITC Ltd shares from 9 am to 10 am, as today is the record date for the demerger.

After trading in the equity and F&O segments for ITC started at 10 am, following the discovery of the equilibrium price in the call auction session, ITC's share price was adjusted to Rs 455.6 on NSE (a fall of Rs 26) and Rs 455 on BSE (an adjustment of Rs 27).

ITC will issue 1 ITC Hotels share for every 10 ITC shares to all unitholders whose names appear in the record books on Monday. This means the last day to buy was Friday, as trade settlement takes T+1 days.


As part of the demerger deal, ITC will retain 40% of the hotel shareholding, and the remaining 60% will be equally distributed among existing ITC shareholders.

Also Read: ITC demerger: Stock exchanges hold special session to set ITC Hotels share price

When will ITC Hotels shares list?

ITC has not yet announced the listing date as it requires regulatory approvals. The market expects the stock to be listed on stock exchanges by mid-February.

Until then, a dummy ticker has been assigned to ITC Hotels on both BSE and NSE. The stock has also been included in the indices at a constant price, which is the difference between the closing price of ITC on Friday and the opening price of ITC discovered during the special pre-open session today.

As of now, ITC Hotels is the 51st stock on Nifty and the 31st stock on Sensex, but only in a dummy form.

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"However, as it is not traded live, its market cap and price will remain constant until it lists. After its listing, for three trading days, the live market cap will be considered to calculate its weight in all the indices," Nuvama said.

This inclusion exercise is being carried out by the exchanges to minimize the impact of any outflows that may occur if the indices adjust to reflect the demerger.

This was also seen in August 2023 when Jio Financial moved out of the heavyweight Reliance Industries (RIL).

Prashanth Tapse, Senior VP (Research), Mehta Equities, said based on peer valuations in the luxury hotel space, ITC Hotels shares can list anywhere in the range of Rs ~100-125 per share on conservative basis.

What does it mean for ITC and ITC Hotels shareholders?

ITC said the demerger will help the hotels business in attracting appropriate investors and strategic partners/ collaborations whose investment strategies and risk profiles are aligned more sharply with the hospitality industry.

In addition, it will unlock value of the Hotels Business for the Company’s shareholders by providing them a direct stake in the new entity along with an independent market driven valuation thereof. This move by the Company also reinforces the sharper capital allocation strategy put in place in recent years, manifest in the pivot to ‘asset-right’ strategy in the Hotels Business.

"Analysts anticipate that ITC's standalone valuation will align more closely with FMCG peers due to improved return ratios and focused growth. At the same time, ITC Hotels could emerge as a premium hospitality stock with its tailored growth strategies," Satish Chandra Aluri, Lemonn Markets Desk, said.