ITC Hotels’ Weak Stock Market Debut, Lists at 31% Discount
New Delhi, January 29: ITC Hotels made a lackluster entry into the domestic stock market today, failing to meet investor expectations. The company’s shares were listed at a discovery price of ₹180, significantly lower than its implied price of ₹260, resulting in a steep 31% discount at the time of listing.
Stock Under Pressure Post Listing
Following the listing, heavy selling pressure pushed ITC Hotels’ stock further down, with the price dropping to ₹172 within minutes. However, some buying support helped the stock recover slightly. By 11:30 AM, ITC Hotels shares were trading at ₹173.65, reflecting ongoing volatility in investor sentiment.
Demerger Strategy and Market Response
ITC had announced its decision to demerge its hotel business last year, aiming to unlock shareholder value. Instead of launching a separate Initial Public Offering (IPO), ITC opted to distribute ITC Hotels shares to existing shareholders. Under this structure, ITC shareholders received one ITC Hotels share for every 10 ITC shares held. The record date for this allocation was set for January 6, 2025.
Market Sentiment and Future Outlook
Despite its strong brand presence in the hospitality industry, ITC Hotels’ weak listing indicates investor caution regarding the company’s standalone valuation and future growth potential. Analysts suggest that market participants may take a wait-and-watch approach before making long-term investment decisions in ITC Hotels.
