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ITC Shares on Record Date: Today, ITC shares will undergo a pre-opening session for price discovery
ITC Share Price
ITC-ITC Hotels Demerger: Monday, January 6, 2025, is a significant day for ITC shareholders as it marks the ‘record date,’ determining eligibility for receiving shares of ITC Hotels when it gets listed on the NSE and BSE. This follows the long-awaited demerger of ITC Hotels, which became effective on January 1, 2025.
ITC Shares on Record Date: Today, ITC shares will undergo a pre-opening session for price discovery between 9:00 AM and 9:45 AM, after which normal trading will resume at 10:00 AM.
Eligible shareholders will receive shares of ITC Hotels in their accounts post the record date.
ITC shares will remain part of the indices for three trading days. However, if the stock hits the circuit limit on the first two days, its removal from the indices will be delayed by an additional three days.
ITC Share Price Expected to Decline After Demerger
Following the demerger, the price of ITC shares is expected to adjust under a special call auction session. The price of ITC Hotels shares will be calculated based on the difference between ITC’s last closing price and its settling price at the end of the session, factoring in the 1:10 demerger ratio.
Nuvama projects an adjustment of Rs 22-25 to ITC’s share price, reflecting its 40% stake in the hotel business and accounting for a 20% holding discount.
ITC will issue one ITC Hotels share for every ten ITC shares held by unitholders as of the record date, Monday. ITC will retain a 40% stake in the hotel business as part of the demerger deal.
Most brokerages estimate that ITC Hotels’ share price will range between Rs 150-200 per share. According to Ambit Capital analyst Karan Khanna, “Assuming an ~18% EBITDA CAGR (FY24-26E; vs 20%+ for peers) and a 15-25% discount to IHCL valuations (due to lower scale), the fair value is expected to be between Rs 190-220 per share (+/- 5%).”
Analysts suggest that the demerger allows ITC to sharpen its focus on high-margin sectors like FMCG, where EBITDA margins rose to 10% in FY24 and are projected to reach 12% by FY26.
In the short term, there may be some downward pressure on ITC Hotels’ stock price, especially if certain shareholders, such as ETFs, are forced to exit. However, SBI Securities believes that any temporary decline in the stock price presents a buying opportunity for retail and HNI investors looking to add a quality business to their long-term portfolios.
Operating independently, ITC Hotels will focus exclusively on the hospitality sector, adopting asset-light models to boost profitability. On the other hand, ITC is well-positioned for a potential re-rating due to its more streamlined and focused business structure, according to Satish Chandra Aluri of Lemonn Markets Desk.
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