ITC Hotels is set to debut as a standalone entity on January 29, 2025, following its demerger from ITC Ltd. But how does this affect investors, and what should you expect in terms of share price and valuation? Let’s break it down.
ITC Hotels demerger: A strategic move
In 2023, ITC Ltd decided to spin off its hotel business into a separate company to unlock value for shareholders. The demerger was finalised with a 1:10 share entitlement ratio, meaning shareholders received one ITC Hotels share for every ten ITC shares they held. The record date for the demerger was January 6, 2025, while the listing date has now been set for January 29, 2025.
With this move, ITC retains 40% of ITC Hotels, while the remaining 60% is distributed among ITC shareholders. This restructuring allows ITC Hotels to focus entirely on its hospitality business and attract strategic investors aligned with the industry’s growth potential.
Also read: ITC Hotel Demerger Effective Jan 1, 2025: Key Details
How ITC Hotels shares were allotted
On January 11, 2025, ITC Hotels allotted 125.12 crore equity shares (Re 1 per share) to ITC Ltd shareholders based on their holdings. Initially, these shares were frozen as “dummy tickets” in investors’ demat accounts until official listing approval from the NSE and BSE, which has now been granted.
Shareholding structure post-demerger
| Entity | Shareholding in ITC Hotels |
| ITC Ltd | 40% |
| Existing ITC shareholders | 60% |
This structure ensures ITC Hotels remains closely tied to ITC while also giving direct ownership to shareholders.
ITC Hotels listing: Date, exchanges, and trading details
The shares of ITC Hotels will start trading on both NSE and BSE from January 29, 2025. The trading will begin in the Series ‘BE’ (Book Entry segment) initially and later shift to Series ‘EQ’ (equity segment).
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Key dates to remember
| Event | Date |
| ITC Hotels demerger effective date | January 1, 2025 |
| Record date for share allotment | January 6, 2025 |
| Share allotment to ITC shareholders | January 11, 2025 |
| ITC Hotels listing date | January 29, 2025 |
What will be the ITC Hotels share price?
There has been a lot of speculation about ITC Hotels’ potential listing price. Brokerage estimates suggest a wide range between ₹113 and ₹300 per share, depending on market conditions and investor sentiment.
Brokerage price predictions
| Brokerage | Expected Listing Price (₹) |
| Nomura | 200 – 300 |
| Nuvama | 150 – 175 |
| SBI Securities | 113 – 170 |
The last discovered prices were ₹260 per share on NSE and ₹270 per share on BSE. However, the final price will be determined in a special pre-open trading session on January 29, 2025.
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How will ITC Hotels fit into stock indices?
After the listing, ITC Hotels will initially be included as a temporary constituent in the Nifty50 and Sensex indices for three trading days before being excluded. If the stock hits circuit limits, its exclusion will be postponed accordingly.
Additionally, ITC Hotels is expected to be included in the MSCI Global Small Cap Index, transitioning from its earlier classification as a “dummy stock” in the Standard Index.
Index impact and passive flows
According to Nuvama Alternative & Quantitative Research, assuming ITC Hotels’ price remains at ₹260 per share, passive flows due to exclusion from key indices will be:
- Nifty50: ~$100 million outflow (current weight: 0.23%)
- Sensex: ~$65 million outflow (current weight: 0.28%)
These movements could impact short-term price fluctuations in ITC Hotels’ shares post-listing.
You may also read: List of FMCG Stocks in India 2025 – StockGro
Why did ITC demerge its hotel business?
ITC has been following a sharper capital allocation strategy, moving towards an “asset-right” model in the hotel business. The demerger allows ITC Hotels to:
- Attract investors focused on the hospitality industry
- Unlock value for existing shareholders by giving them direct ownership in the hotel business
- Expand independently, aiming for 200+ hotels and 18,000+ rooms by 2030
Currently, ITC Hotels operates 140 properties with over 13,000 keys across six brands, making it India’s second-largest hotel chain post-demerger.
Also Read: Fast-Moving Consumer Goods (FMCG) Sector- A Safe Haven in Bear Markets?
Impact on ITC Ltd post-demerger
With the separation of its hotel business, ITC Ltd’s stock price was adjusted in a special trading session on January 6, 2025. The stock price fell by:
- ₹26 on NSE to ₹455.60
- ₹27 on BSE to ₹455
Nuvama has revised ITC Ltd’s target price from ₹585 to ₹571, factoring in the 40% stake it retains in ITC Hotels.
Q3 FY25 expectations for ITC Ltd
Post-demerger, ITC Ltd remains focused on FMCG, tobacco, agriculture, and paperboard businesses. Analysts expect:
- Revenue growth of 8% YoY
- EBITDA growth of 1% YoY
- FMCG profit decline of 10% YoY due to margin pressures
- Agriculture business recovery, supporting overall performance
Despite short-term fluctuations, analysts maintain a BUY rating on ITC Ltd due to its attractive valuations, strong dividend yield, and diversified business portfolio.
Final thoughts: Should you invest in ITC Hotels?
The demerger of ITC Hotels is a major shift that gives investors direct exposure to the luxury hospitality sector. The upcoming listing on January 29, 2025, is expected to provide clarity on valuation and market positioning.
With ITC Hotels targeting steady expansion and a focus on premium properties, its long-term growth potential looks promising. However, short-term volatility is likely due to passive index exclusions and initial price discovery.
For investors, ITC Hotels offers a chance to own a piece of one of India’s largest hotel chains, while ITC Ltd remains a solid diversified play. Whether to invest will depend on your risk appetite and long-term view on the hospitality industry.
