The recent spinoff of ITC Ltd’s hotels division has generated significant interest in the market, with the discovered price of shares standing at around ₹455 apiece after a special trading session. This move, which saw the effective date for demerger set for January 1, 2025, marks a significant development for the conglomerate.
According to market experts, the discovery price of ₹455.60 for ITC Hotels was in line with expectations, and shareholders of ITC Ltd are set to receive 1 share of ITC Hotels for every 10 held in the parent company. The listing of ITC Hotels is expected to take place before February 2025, with an estimated valuation range of ₹100-125 per share.
The upcoming listing of ITC Hotels as a separate entity post-demerger is anticipated to unlock substantial shareholder value and enable the newly-formed company to focus on growth in the luxury hospitality sector. With plans to open one hotel per month for the next 24 months, ITC Hotels is poised for robust growth and has a strong zero-debt balance sheet with cash equivalents of ₹1500 crore.
The reorganization is expected to ensure continued interest of ITC in the hospitality business with a sharper focus and optimal cost structure. ITC Hotels, as a new entity, will have a solid foundation to pursue growth in the luxury hospitality sector and is projected to achieve a revenue CAGR of 13.8% over FY24-27E.
Overall, the demerger of ITC’s hotels division represents a strategic move that aligns with the conglomerate’s growth objectives and is expected to create value for shareholders in the long run. As the market eagerly anticipates the listing of ITC Hotels, all eyes are on the performance and growth prospects of the new entity in the evolving landscape of the hospitality industry.
