ITC Hotels to join Nifty: Last day to buy before demerger

Shares of ITC Hotels will list on the BSE and NSE in a dummy format as part of a strategic demerger. This move is designed to minimize the impact on the Sensex and Nifty indices. The stock will not be tradable until the official listing in the coming weeks.

Important Dates and Share Allocation

The record date for ITC Hotels’ demerger is set for January 6, 2025. Investors who purchase ITC shares by today, January 3, will receive one ITC Hotels share for every ten ITC shares they hold. The demerger allocates 40 per cent of ITC Hotels' shareholding to ITC, while the remaining 60 per cent will be distributed among existing ITC shareholders.

Dummy Ticker and Market Impact

To prepare for the listing, the BSE and NSE will introduce a dummy ticker for ITC Hotels, similar to the approach taken when Jio Financial separated from Reliance Industries. This dummy version of ITC Hotels will be added as the 51st constituent in Nifty and the 31st constituent in Sensex, influencing index calculations. However, its market capitalization and price will remain fixed until the official listing, expected by mid-February 2025.

Share Price Calculation and Pre-Listing Activity

The share price of ITC Hotels will be calculated using a special pre-open session scheduled for January 6. The fair value of ITC Hotels shares will reflect the difference between ITC’s closing price on January 3 and the opening price of ITC Hotels determined during the session.

Future Valuation and Growth Potential

Analysts predict that ITC Hotels shares could list in the Rs 200-300 range, with a market capitalization of Rs 42,500-62,000 crore. The luxury hospitality sector's growth, along with the company’s financial performance, positions ITC Hotels for strong future expansion. Brokerage firms suggest that despite potential short-term fluctuations, investors should consider accumulating shares for long-term gains.