ITC Hotels Shares Debut with a 30% Discount on the Market

ITC Hotels Shares Debut with a 30% Discount on the Market

ITC Hotels shares were listed at ₹188 each on the BSE, reflecting a 30.37% discount compared to the discovered price of ₹270 per share.

On January 29, 2025, ITC Hotels, which recently separated from its parent company ITC Ltd., made its debut on the stock market. The shares listed at ₹188 each on the Bombay Stock Exchange (BSE), which is about 30% lower than the ₹270 per share price at the time of discovery. On the National Stock Exchange (NSE), the shares were listed at ₹180, reflecting a similar discount of 30.77% from the ₹260 discovered price.

After the listing, ITC Hotels shares continued to fall, hitting the lower price limit (5% drop) on the BSE, with shares trading at ₹178.60 each.

This listing comes after ITC Ltd demerged its hotel business to create ITC Hotels as a separate company. As a result of the demerger, ITC Ltd’s shareholders received one ITC Hotels share for every ten shares they held in ITC Ltd. ITC Ltd retained 40% of ITC Hotels, while the remaining 60% was distributed to the shareholders.

As ITC Hotels started trading, experts believe the value for ITC Ltd’s stock won’t change much in the short term, since its stock price is expected to adjust after the demerger. DevenChoksey Research has lowered its target price for ITC shares to ₹520, down from ₹534, to reflect this adjustment.

ITC Hotels is now one of India’s largest hotel chains, with 140 hotels and about 13,000 rooms. The company has big plans for growth, aiming to expand to over 200 hotels and 18,000 rooms by 2030. Around 35% of these hotels are owned by ITC Hotels, while the rest are managed or run under a franchise model.

The hotel business is showing strong performance, with the average room rate (ARR) and revenue per available room (RevPAR) increasing by 20% and 18% year-over-year in FY24, respectively. Its occupancy rate stands at 69%, and the company enjoys healthy returns with a 20% return on capital employed (RoCE). ITC Hotels has little debt and a solid cash surplus, which makes it well-positioned for growth in the coming years.

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