The new year starts with a bang. The ITC demerger will become effective tomorrow- January 1, 2025, and the record date has been fixed on January 6, 2025. That day the ITC stock goes ex-demerger. What does it all mean for ITC shareholders? Will existing shareholders get ITC Hotel stocks and how many? Also are you eligible for ITC Hotel stocks if you buy ITC on January 6? Well, the final date to qualify for ITC Hotels shares with existing ITC shares is January 3, 2025, as investors must possess shares in ITC on the ex-date of January 6, 2025.
Well, that is only if you do not have ITC shares yet. The existing shareholders are going to receive one share of ITC Hotels for every 10 shares of ITC. The demerger will be done through a special pre-open session that will result in ITC Hotels. The hotel arm will be ascribed an intrinsic value based on the pre-open session.
Will ITC Hotels shares reflect in your portfolio immediately?
As the shares of ITC Hotels have not yet been transferred to qualified ITC shareholders and approval from the exchanges is still awaited, the ITC Hotel stock will continue to exist as a dormant stock within the benchmark indices Nifty 50 and BSE Sensex. ITC will carry on trading in the regular market following the adjustments made for the spin-off of its hotel business division.
After the ITC Hotels shares have been credited to the shareholders and trading is allowed by the exchange, the ITC Hotels will be taken out of the indices only after the third trading day. In case the share price of ITC Hotels hits the circuit on both first two days, then exclusion will be deferred by another three days.
Is ITC a value buy at this price?
In a recent report, Antique Broking has given a price target of Rs 563 per equity share, around 18% higher than the current market price. Antique noted that the positive outlook for ITC appears to be supported by the strong demand for hotels and the recovery in the agricultural business.
What’s the hype all about?
The FMCG-behemoth ITC announced to de-merge its hotel business into a different entity, ITC Hotels.
In an exchange filing the company said that the National Company Law Tribunal (NCLT) bench of Kolkata had sanctioned the scheme of arrangement amongst ITC Ltd.
» Read More
