ITC Hotels stock opens at Rs 180 on NSE, 31% below expected price post-demerger

Shares of ITC Hotels made their stock market debut on January 29, listing at Rs 180 per share on the National Stock Exchange (NSE). The IPO-less listing reflected a nearly 31% discount from its implied price of Rs 260 per share post-demerger from its parent company, ITC Ltd.

On the Bombay Stock Exchange (BSE), the stock opened slightly higher at Rs 188 per share, still marking a 30% discount from the implied price of Rs 270 per share. The company's market capitalization stood at over Rs 37,461 crore, as per exchange data.

ITC had announced the demerger of its hotel business last year to unlock value for shareholders. As per the demerger ratio of 1:10, shareholders who held 10 shares of ITC as of January 6, 2025, received one share of ITC Hotels in the newly formed entity.

60% of ITC Hotels' stake is directly held by ITC shareholders, proportional to their ITC holdings.
40% stake remains with ITC Ltd.

To facilitate the transition, NSE and BSE conducted a special trading session on January 6 to determine ITC Hotels' market value. During this session, ITC's share price—excluding the value of its hotels business—was discovered at Rs 455, reflecting a Rs 27 drop from the previous day’s closing price.

Additionally, as part of the demerger scheme, investments in ITC's hospitality subsidiaries—including Bay Islands Hotels Ltd, Fortune Park Hotels Ltd, Landbase India Ltd, Srinivasa Resorts Ltd, WelcomHotels Lanka Pvt Ltd, Gujarat Hotels Ltd, International Travel House Ltd, and Maharaja Heritage Resorts Ltd—were transferred to ITC Hotels Ltd.

The listing price of Rs 180 per share was slightly higher than estimates provided by brokerage firms:

Nuvama had predicted a listing range of Rs 150–175 per share.
Sharekhan had estimated Rs 150–170 per share.
However, the listing price fell below Japanese brokerage Nomura's estimate of Rs 200–300 per share.