ITC Ltd News (Demerger, Shares Adjust 6%)
ITC Limited has announced January 6, 2025, as the record date for the much-anticipated demerger of its hotel business, ITC Hotels. This development marks a significant milestone in ITC’s strategic move to unlock value for shareholders while providing ITC Hotels with an independent platform for growth. Analysts estimate that the listing price for ITC Hotels shares could fall between ₹150 to ₹300 per share, depending on market conditions and investor sentiment.
The decision to spin off the hotel business is part of ITC’s larger objective to streamline its diverse portfolio, which spans FMCG, agriculture, paperboards, and hotels. By separating the hospitality business, ITC aims to offer better operational focus and financial independence to ITC Hotels.
The market has responded positively to the demerger, with investors and analysts alike viewing it as a strategic step towards enhancing the overall value of ITC’s businesses.
1 ITC Hotels Share for Every 10 ITC Shares
Under the demerger plan, ITC shareholders will receive one share of ITC Hotels for every 10 shares of ITC held as of the record date. This ratio ensures that existing ITC investors will have a direct stake in the newly formed entity, allowing them to benefit from the future growth potential of ITC Hotels.
ITC Limited will retain a 40% stake in ITC Hotels, maintaining a significant interest in the hospitality business. This decision underscores ITC’s confidence in the long-term growth prospects of its hotel division, which has demonstrated resilience and adaptability in recent years.
The demerger is expected to allow ITC Hotels to operate as an autonomous entity, providing greater agility and flexibility to scale its operations, invest in new ventures, and focus on its core competencies in the hospitality sector.
With a diversified portfolio of luxury and mid-market properties, ITC Hotels is well-positioned to capitalize on the growing demand for travel and tourism in India. The hospitality industry is rebounding strongly post-pandemic, and ITC Hotels is expected to leverage its strong brand presence and sustainable practices to achieve robust growth.
ITC Share Price Adjust Nearly 6% Due to Demerger
The announcement of the demerger has led to adjustments in ITC’s share price, which fell by approximately 6% on the Bombay Stock Exchange (BSE). Following the adjustment, ITC shares settled at ₹455 per share on January 5, 2025.
The price correction reflects the separation of the hotel business from ITC’s core operations, as the market realigns ITC’s valuation to focus on its remaining businesses. Despite the temporary dip, market experts remain optimistic about ITC’s prospects, particularly in its high-growth FMCG and agribusiness segments.
As the listing of ITC Hotels approaches, investors are eagerly watching for further announcements that could impact the valuation and market performance of both entities.