ITC Hotels demerger: Shares hit 5 pc lower circuit limit after opening at Rs 188

Shares of ITC Hotels debuted on the stock exchange on Wednesday, following its demerger from the cigarettes to software services conglomerate ITC. The shares listed at Rs 188 on the BSE, considerably lower than the assigned value of around Rs 270 during a special price discovery session earlier this month.

The shares further fell post listing and were trading at the 5 per cent lower circuit limit at Rs 178.60 on the BSE. Shares of parent ITC were also trading 0.3 per cent lower at Rs 433.85 at noon, while the broader Sensex was up 0.7 per cent or around 555 points.

Analysts at Nuvama Institutional Equities anticipated the initial market price for ITC Hotels could be in the Rs 150-175 a share range.

ITC issued 1 share of ITC Hotels for every 10 held in ITC to shareholders whose names appeared in its record books as of January 6. The demerger has been such that 60 per cent stake in the company will be with shareholders, while parent ITC will continue to hold 40 per cent stake.

ITC Hotels has a portfolio of more than 140 hotels and resorts, with 13,000 rooms across over 90 destinations, and is among the fastest-growing hospitality chains in the country, according to Anil Chadha, the managing director of ITC Hotels.

The company is eyeing a portfolio of 200 hotels by 2030.

With the demerger, ITC Hotels will be the second-largest hospitality chain in India after Indian Hotels Co Ltd (IHCL). Tata-owned IHCL had a portfolio of 237 operational hotels with 25,935 rooms as of December 31, 2024. Another 123 hotels, with 17,664 rooms are currently in the pipeline.

Post COVID-19, there has been strong growth in tourism and travel. That coupled with a growing trend of premiumisation across consumer segments has helped hotel operators like IHCL, ITC and others.

Over the past 12 months, IHCL shares have risen more than 55 per cent, although it is down about 13 per cent from the life high of Rs 894.15, hit on December 30, 2024. On Wednesday, IHCL shares were trading at Rs 771.90, up 2.5 per cent on the BSE. Other hotel chains were also seeing good buying interest on Wednesday with Chalet Hotels up 4.5 per cent, Lemon Tree Hotels rising 4 per cent and EIH Ltd gaining 3 per cent.

"Given the attractive growth potential for domestic tourism industry and strong company financials, ITC Hotels has a long runway to capture the growth opportunities in the tourism industry," analysts at SBI Securities had said earlier.