Mon Jan 06 14:44:51 IST 2025: ## ITC Stock Dips After Hotel Business Spin-off, But Analysts Remain Bullish
**MUMBAI, INDIA** – Shares of ITC Ltd. experienced a 6% drop in early Monday trading following the demerger of its hotel business, ITC Hotels, into a separate publicly listed entity. However, this decline reflects the value assigned to the newly independent ITC Hotels shares, rather than a loss of overall value for ITC investors.
Each ITC shareholder received one share of ITC Hotels for every 10 ITC shares held. The pre-opening trading session set the price of ITC Hotels at Rs 27 per share, resulting in the Rs 455 opening price for ITC. This price represents the value of ITC shares minus the value of the detached ITC Hotels share. ITC Hotels will begin trading under its own ticker symbol in February.
Despite the initial dip, several brokerages maintain a positive outlook on ITC’s future. B&K Securities highlighted ITC Hotels’ strong financial position, including a zero-debt balance sheet and robust expansion plans, predicting a fair value of Rs 145 per share. They maintained a ‘buy’ rating for ITC stock with a target price of Rs 588.
ICICIdirect also lauded the demerger as beneficial for shareholders, setting a target price of Rs 195 for ITC Hotels shares and valuing ITC shares at Rs 555. Centrum Broking believes the demerger will attract investors more aligned with the hospitality sector, benefiting ITC Hotels’ growth. The demerged entity is expected to list on the bourses in February.
First Piper 