On January 6, 2025, ITC announced the effective date for the demerger of its hotels business, with the shares of ITC Ltd turning ex-date for this demerger. Eligible shareholders will be allotted one ITC Hotels share for every 10 ITC shares held, with the demerger ratio set at 1:10. The ITC Hotels share price is expected to be adjusted by Rs. 22-25, taking into account a 20% holding discount and a 40% stake in the hotel business. Nuvama predicts that the initial market price for ITC Hotels shares will range between Rs. 150-175. After its initial listing, ITC Hotels will be included in Nifty50 and Sensex indices, but will then be removed at its last traded price three days after listing.
ITC Hotel Demerger: Key Information and FAQs
Background
ITC Limited (ITC), a leading Indian conglomerate, anunciou a demerger of its hotels business on January 6, 2025. The demerger involves separating the hotels division from the parent company and creating a new publicly traded entity known as ITC Hotels.
Key Details
FAQs
Q1: What is the purpose of the demerger? A: The demerger aims to unlock value for shareholders by creating a separate entity focused solely on the hotels business. It will allow ITC to focus on its core businesses, while ITC Hotels can pursue its own growth strategy.
Q2: How will the demerger affect ITC shareholders? A: Eligible ITC shareholders will receive one ITC Hotels share for every 10 ITC shares held. The ITC share price is expected to adjust accordingly.
Q3: What is the expected timeline for the demerger? A: The effective date for the demerger is January 6, 2025. ITC shares will turn ex-date on the same day. Eligible shareholders will receive ITC Hotels shares after the demerger process is complete.
Q4: Will ITC Hotels be a publicly traded company? A: Yes, ITC Hotels will be listed on the stock exchange and traded publicly after the demerger.
Q5: How will the demerger impact the valuation of ITC and ITC Hotels? A: The demerger is expected to create value for both ITC and ITC Hotels. ITC shareholders will benefit from the separation of the hotels business, while ITC Hotels will be valued based on its own financial performance and growth prospects.
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