The share price of the de-merged entity ITC Hotels trades in the red for the second consecutive session. The stock fell 5% to an intra-day low of Rs 163.25 on Thursday a day after listing. ITC Hotels was listed on NSE and BSE on January 29.
The share price of ITC Hotels fell as much as 5% on the listing day as well, closing its first trading session 4.5% lower on the NSE. It was listed at a price of Rs 180 on the NSE and Rs 188 on the BSE.
In January 2025, ITC announced the plans to de-merge its hotel business and list it as a separate entity, a move seen as a value unlocking. It divided the hotel business with a 1:10 ratio scheme. This means a person holding 10 stocks of ITC will receive one stock of ITC Hotels. ITC has maintained 40% ownership in ITC Hotels, while the other 60% was allocated to shareholders.
Apart from that, the brokerage firm, Jefferies believes that owing to ETF selling ITC Hotels will witness significant outflow. Not just that, it further expects that British American Tobacco may slash 10% of its stake in ITC Hotels and hold a 15% share in it. As of now, BAT has a 25% stake in it.
About ITC Hotels
ITC Hotels manages a portfolio of 140 properties overall and a total of 13,000 rooms. This includes both owned and managed rooms, with the current ratio of owned to managed rooms being 45:55. They have 6 different brands. The company have an occupancy rate of 69% in FY24. In FY24, the hotel business contributed 4.1% of ITC’s overall revenue. Its operating profit contribution from the hotel business was 3%. The Average Room Rate (ARR) has increased to Rs 12,000 from Rs 7,900 in FY19, an increase of 52%.
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