By ITTeam On January 6, 2025, ITC Limited, a diversified conglomerate, reached a significant milestone with the demerger of its hotels business, ITC Hotels. This strategic move aims to unlock value for shareholders and provide focused growth opportunities for the hospitality segment. The demerger process was marked by a special pre-open trading session on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE), facilitating price discovery for the newly formed entity.
Special Pre-Open Session Details
The special pre-open session (SPOS) was conducted between 9:00 a.m. and 9:45 a.m. on January 6, 2025. This session was crucial for determining the base price of ITC Hotels shares post-demerger. The price was established by calculating the difference between ITC’s closing price on January 3, 2025, and the price discovered during the SPOS. Following this session, normal trading for ITC resumed at 10:00 a.m.
Shareholder Entitlement
As per the demerger scheme, ITC shareholders are entitled to receive one fully paid-up equity share of ITC Hotels Limited (face value of ₹1 each) for every ten equity shares held in ITC Limited. The record date to determine shareholder eligibility was January 6, 2025. Shareholders holding ITC shares as of this date will have ITC Hotels shares credited to their demat accounts once the demerger process is finalized.
Listing and Trading of ITC Hotels Shares
Post-demerger, ITC Hotels is expected to be listed on both BSE and NSE. The shares will be included in benchmark indices such as Nifty 50 and BSE Sensex at a constant price for the listing day and the subsequent three trading days. This inclusion ensures stability and provides investors with an opportunity to trade the new entity’s shares. If the stock hits circuit limits during this period, the exclusion will be postponed by two trading days each time.
Strategic Rationale Behind the Demerger
The demerger of ITC Hotels is part of ITC Limited’s strategic initiative to unlock value and allow focused growth for its hospitality business. By creating a separate entity, ITC Hotels can pursue tailored strategies, attract specific investments, and enhance operational efficiencies within the hospitality sector. ITC Limited will retain a 40% stake in the new entity, while the remaining 60% will be distributed among existing ITC shareholders.
Implications for Investors
For investors, the demerger presents an opportunity to directly participate in the growth trajectory of ITC Hotels. The hospitality industry in India is poised for significant expansion, and ITC Hotels, with its strong brand presence and diversified portfolio, is well-positioned to capitalize on this growth. Shareholders are advised to monitor the listing and trading commencement of ITC Hotels shares to make informed investment decisions.
Conclusion
The successful execution of the demerger and the special pre-open session marks a new chapter for ITC Hotels and its stakeholders. As the hospitality arm embarks on its independent journey, it aims to leverage its legacy, brand strength, and strategic focus to deliver value to its shareholders and exceptional experiences to its guests.