ITC Hotels Listing Price Can Reach ₹300 After Demerger, Says Nomura; Here’s What Brokerages Said

As per global brokerage firm Nomura, shares of ITC Hotels will list between the range of ₹200-300 apiece. Previously, ITC Ltd decided to part ways with its hotel business, which came into effect on New Year's day.

Nomura's Mihir P Shah said, “We believe the listing of ITC Hotels shares will be in the range of Rs 200-300 per share at a market cap of Rs 42,500-62,000 crore, which is higher than our and consensus current estimates.”

ITC Hotels is set to make its debut on the exchanges before mid-February. For every 10 shares held in ITC, shareholders will receive one share of ITC Hotels Ltd.

Nomura has given a target price of ₹575 to imply a target P/E multiple of 28x.

Centrum Broking has pegged a target price of Rs 583 on ITC.

Centrum said, “We note the proposed reorganization would ensure continued interest of ITC in hospitality business with sharper focus and optimal cost structure banking on its brand equity and goodwill. Further the demerger will help the new entity in attracting appropriate investors and strategic partner/collaborations whose strategies and risk profiles are aligned more sharply with the hospitality industry. We assign EV/EBITDA of 30x on FY26/27E (20% disc. to Indian Hotels) to arrive Rs36/share value (40% ITC’s holding & 20% hold disc.) and would adjust Rs17/share (4% on CMP) from ITC.”

As per the demerger, ITC has retained a control of 40% stake in its hotels business, while the remaining 60% would be distributed among the existing ITC shareholders.

About 4.3% of ITC’s overall sales came from hotel business in FY24.

As of now, ITC holds 40 properties with over 13,000 keys (45% owned) across over 90 locations under 6 brands in luxury, premium and budget segments.

“Based on our back of the envelope calculations we assign EV/EBITDA on FY26/27E at 30x (20% disc. to Indian Hotels) to arrive Rs36/share value (40% ITC’s holding & 20% hold disc.) and would adjust Rs17/share (4% on CMP) from ITC,” Centrum said.

ITC’s share price is set to be adjusted by ₹22-25, reflecting a 40% stake in the hotel business and incorporating a 20% holding discount, Nuvama said.

ITC Hotels will be maintained in all the NSE and BSE Indices at a constant price.

Nuvama said, “ITC Hotels will be dropped from all the NSE and BSE indices at the last traded price which is Effective at the open of ITC Hotels listing date + 3 business days. If the stock hits circuit limits, the exclusion will be postponed by two trading days each time. If ITC Hotels lists on February 10, 2025 then stock will compulsorily be deleted on February 13, 2025.”