On January 29, 2025, ITC Hotels, the newly demerged entity from the diversified conglomerate ITC Ltd, began trading on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The shares debuted at ₹180 per share on the NSE, which was a significant 30.7% discount from the implied price of ₹260 per share. On the BSE, the shares are listed at ₹188, reflecting a 30.3% discount to the implied price of ₹270. At the same time, ITC Ltd’s stock was trading at ₹432.55, marking a slight dip of ₹2.90 or 0.67%.
Demerger Details and Timeline
The separation of ITC Hotels from its parent company, ITC Ltd, officially came into effect on January 1, 2025. Shareholders of ITC Ltd were eligible for this demerger, with January 6 being the record date. As per the demerger scheme, ITC shareholders received one share of ITC Hotels Ltd (ITCHL) for every ten shares held in ITC Ltd. A special trading session was held on January 6 to determine the price of ITC Hotels following the demerger, which revealed that ITC Ltd’s shares settled at ₹455.60 on the NSE and ₹455 on the BSE. The equity shares of ITC Hotels started trading in Series ‘BE’ on the stock exchanges, with plans to shift to Series ‘EQ’ in due course.
Background and Cost of Acquisition
The process leading to the demerger began in July 2023, when ITC announced the creation of ITC Hotels Ltd as a wholly owned subsidiary to manage its hospitality business. The scheme, which was approved by shareholders in August 2023, is seen as a strategy to enhance growth and provide long-term stability to ITC Hotels. As part of the demerger, investments in multiple hospitality entities, including Bay Islands Hotels Ltd, Fortune Park Hotels Ltd, and WelcomHotels Lanka Pvt Ltd, were transferred to ITC Hotels.
In a press release issued on January 28, ITC clarified the cost of acquisition for shareholders receiving ITC Hotels shares. The total cost of acquiring 100 shares of ITC Hotels was stated to be ₹54,040, rather than the earlier figure of ₹50,040. The company explained that shareholders who had purchased 1,000 shares of ITC Ltd at ₹400 each would now receive 100 shares of ITC Hotels, with the acquisition cost proportionally distributed between the two entities.
As ITC Hotels begins its journey as an independent entity, it aims to build upon its strong legacy, having operated India’s premier chain of luxury hotels since its founding in 1975. The company now operates over 140 hotels across more than 90 locations in the country.
