ITC Hotels demerger to unlock value for parent company, ITC, says Nuvama Equities

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ITC Hotels demerger. The ITC board granted in principle permission for the National Company Law Tribunal's (NCLT) scheme of arrangement to demerge its hotel business through the establishment of a wholly owned subsidiary, ITC Hotels Ltd on Monday, July 24. ITC analyst call was held on Thursday, July 27.

The domestic brokerage reported after the ITC analyst call that the demerger of the hotel division creates value for current ITC shareholders. The brokerage has kept its buy recommendation with a target price of ₹560 based on SoTP. Let's look at some key takeaways from the ITC analyst call that were highlighted by brokerage.

Also Read: ITC hotels unit stock expected to be valued in ₹15-27 range; here's what analysts have to say on ITC demerger A board meeting over a potential reorganisation is scheduled for Monday, August 14, according to the brokerage's report. ITC Hotels will list on exchanges following clearances, and they estimate that the process will take 12 to 18 months (approvals from regulators, notably NCLT, are required). ITC share price opened at intraday high of ₹469.95 apiece on BSE on Friday's session.

ITC shares touched an intrday low of ₹463.50. According to trendlyne data. ITC share price rose 53.1% and outperformed its sector by 2.6% in the past year.

The overall trend for ITC, according to Ruchit Jain, Lead Research Analyst at 5paisa, is still good. Due to heavy open interest and frequent call writing at the ₹500 strike price, ITC shares saw unfavourable price action when they hit resistance at the 500 level. According to Jain, any dip towards the ₹450–455 zone would probably find support.