
In a significant update, ITC Hotels shares will not be listed today – A special pre-open trading session is being conducted by the BSE and NSE from 9 am to 10 am for price discovery.
Key Details:
- ITC Hotels shares will undergo a price discovery process but will not trade today.
- Stock exchanges will create a dummy ticker to reflect ITC Hotels as the 51st Nifty stock and 31st Sensex stock until the formal listing occurs, which is anticipated by mid-February 2025.
Nuvama’s Report Highlights:
- Passive Selling Pressures:
Nuvama warns that ITC Hotels may face passive selling pressures upon listing as passive fund managers might offload shares during the initial phase. This could result in temporary price volatility. - Derivatives and Liquidity Concerns:
- ITC Hotels is unlikely to be included in derivatives trading for six months, as per SEBI’s regulations.
- These restrictions could affect liquidity initially, but Nuvama notes that its inclusion in indices like the MSCI Global Small Cap Index will provide long-term support.
- Valuation Projections:
- ITC Hotels: ₹150-175 per share.
- ITC Post-Demerger: Expected to adjust downward by ₹18 per share.
- Operational Metrics and Market Positioning:
- The report highlights ITC Hotels’ strong operational performance and market positioning, which aligns with the projected valuation.
- Shareholder Value Creation:
- Nuvama views the demerger as a significant step in unlocking value for ITC shareholders, making ITC Hotels a key stock to watch in early 2025.
- Index Inclusion & Adjustments:
- Post-Demerger: ITC Hotels is expected to be included in the Nifty 500, with broader index inclusion likely once trading stabilizes.
- Active and passive fund managers are expected to adjust their portfolios during this period.