Mon Jan 06 17:14:42 IST 2025: ## ITC Stock Plunges 6% Ahead of ITC Hotels Demerger

**Mumbai, India –** ITC shares experienced a significant drop of nearly 6% in early trading on Monday, reaching a low of Rs 455, following a special pre-open session to determine the price of its soon-to-be-listed hotels subsidiary, ITC Hotels.

The pre-open session, held between 9:00 AM and 9:45 AM, established ITC Hotels’ initial share price at Rs 27 on the BSE and Rs 26 on the NSE. This was calculated based on the difference between ITC’s Friday closing price (around Rs 482 on BSE) and its price during the special session. ITC shareholders will receive one ITC Hotels share for every 10 ITC shares held.

While ITC Hotels will officially list in February 2024, trading will not begin until then. Analysts predict a significant price jump once trading commences, with estimates ranging from Rs 150 to Rs 175 per share. Systematix, a financial research firm, valued ITC Hotels at Rs 150 per share, citing its position as India’s second-largest hotel chain with 140 properties. The firm also highlighted the positive impact on ITC’s return on capital employed (ROCE), which is projected to increase from 40% to 43% post-demerger.

ITC Hotels will start operations as a debt-free entity with Rs 1,500 crore in cash. ITC will retain a 40% stake, with the remaining 60% distributed among existing ITC shareholders.

Despite the initial share price drop, analysts maintain a neutral to positive outlook on ITC shares following the demerger, believing the separation will allow the company to focus on its core businesses. Nuvama’s FMCG research team estimates the price adjustment for ITC due to the demerger to be around Rs 18 per share, aligning with the predicted trading range for ITC Hotels.

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