Shares of tobacco-to-FMCG conglomerate ITC took a hit today (January 6) as the company’s hotel business ITC Hotels will be spun off from its parent company. A special pre-opening session will be conducted in the stock between 9:00 am to 10:00 am to measure the indirect value of ITC hotels and normal trading will resume in Nify heavyweight at 10:00 am.
The special pre-opening session (SPOS) is a one-hour window to help determine the adjusted price of ITC (the parent company) after the demerger of the hotel business. This ensures that the market price reflects the segmentation correctly and clearly.
For ITC hotels, the price will be calculated as the difference between the ITC closing price on January 3, and the ITC price received during SPOS. This process helps to find a fair value for ITC Hotels shares before they start trading officially.
As per analysts and brokerages, the price of ITC may be adjusted by Rs 22-25 due to the dampening effect.
Today is also the record day for the company’s sale, which means that shareholders’ eligibility for shares of the demerged entity will be determined today on the basis of the ITC shares held by investors in their portfolios today. Under the split plan, ITC shareholders will be eligible to receive 1 share of ITC Hotels for every 10 shares they hold. Accordingly, ITC will hold 40 percent of the business of the newly demerged hotels and the remaining 60 percent will be held by the existing shareholders in proportion to their holdings in ITC.
Listing of ITC hotels and pricing thereof
ITC hotels as per Zee Business survey estimates may be listed in the boze in 30-40 days. Further, until the listing, the shares of ITC Hotels will be reflected at a fixed price on all indices of which ITC is a member. In the Nifty and Sensex indices, the stock will rank 51st and 31st respectively, and will remain in the indices for three trading sessions following the listing.
In the event that the stock reaches the regional limits, the release will be postponed by two trading days each time.
Brokerage firm Nomura had expected a listing price for ITC Hotels in the range of Rs 200-300 per share.