ITDC shares in focus as cabinet likely to take Ashok Hotel leasing out proposal in a month; Centre in last leg of finalising draft note

In apparent good news for ITDC investors, the government is in the last phase of preparing a draft note for the asset monetisation and leasing of an iconic and premium Ashok Hotel, Zee Business Special Correspondent Chetan Bhutani said, quoting sources, on Tuesday.

Bhutani said the inter-ministerial consultation has been almost completed and only Law Ministry’s comments are remaining to be added in the draft note, as per the protocol. He said the cabinet is likely to take up the asset monetisation and leasing proposal of Ashok Hotel within 30-45 days.

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Since this is a final proposal of asset monetisation and divestment as well as leasing out proposal, it would require approval of the Cabinet Committee on Economic Affairs, Bhutani said in a report. 

Earlier in March 2021, Bhutani, citing sources, had said that the government is mulling to lease one of its most valuable hotels – Ashok Hotel, which is operated by Indian Tourism Development Corporation, a government of Indian undertaking.

Bhutani had said that the government aims to raise around Rs 7000 crore by leasing this hotel for 60 years. Wherein, it will garner Rs 5,000 crore by leasing Hotel Ashok for 60 years and would raise around Rs 2,000 crore by monetising the land assets fall under Ashok Hotel. 

Fundraising is for more than double its market cap (Rs 3500 crore), Zee Business Managing Director Anil Singhvi said. It’s a big news for ITDC investors as ITDC stock would go for re-rating once the leasing and asset monetisation of Ashok Hotel is cleared, he said.

With the company being completely debt-free, there is a room for an expansion too, says Singhvi, adding further that once this happens, the stock will certainly stop until Rs 550-600 per share level.

Similarly, the market analyst Kunal Saraogi says the stock looks good on charts and is showing a turnaround. He adds further that Rs 450 per share is an important level for stock, and once it breaches this level, it would fly to Rs 650 per share levels soon, which could be termed as a target.