ITC Hotels Shares To Be Removed From Sensex And BSE Today; Here’s Why

Last Updated: February 05, 2025, 09:50 IST

ITC Hotels shares were briefly consisted of in the Sensex and various other indices for profile rebalancing by easy funds

The share cost of ITC Hotels will certainly remain in concentrate on Wednesday, as the supply will certainly be gotten rid of from the Sensex and various other BSE indices prior to trading starts on February 5, 2025. ITC Hotels, a demerged entity of ITC Ltd, was noted individually last month.

The supply was briefly consisted of in the Sensex and various other indices for profile rebalancing objectives by easy funds. ITC Hotels shares started trading on Indian stock market on January 29.

Since ITC Hotels did not strike the reduced circuit limitation by the cut-off time of 2 pm on Tuesday, February 4, it will certainly be gotten rid of from the BSE indices.

According to a notification on the BSE, “As ITCHOTELS did not strike the reduced circuit by the cut-off time, the firm will certainly be gone down from all BSE indices efficient prior to the opening of trading on Wednesday, February 5, 2025.”

Shares of ITC Hotels last closed at Rs 165, down 4.16%. As the stock is set to be removed from the Sensex, index trackers had to sell shares worth over Rs 400 crore, with another Rs 700 crore in selling expected when it is also excluded from the NSE Nifty.

The demerged entity was listed on the NSE and BSE at Rs 180 and Rs 188 per share, respectively, with an initial market valuation of Rs 39,126.02 crore. However, its market value has since dropped to Rs 34,266.48 crore. Under the demerger, ITC Ltd retained a 40% stake in ITC Hotels, while the remaining 60% was distributed to ITC shareholders in a 10:1 ratio. The total cost of acquiring 100 shares of ITC Hotels stands at Rs 54,040.

ITC Hotels has demonstrated strong operational performance, with its Average Room Rate (ARR) rising from Rs 7,900 in FY19 to Rs 12,000 in FY24, marking a 51.9% increase (CAGR of 8.7%). Revenue Per Available Room (RevPAR) also saw a significant rise from Rs 5,200 to Rs 8,200 during the same period, a 57.7% increase (CAGR of 9.5%). In FY24, room sales accounted for 52% of total revenue, while food and beverage made up 40%.

Analysts believe that ITC Hotels will benefit from a strong industry cycle, with limited new capacity and growing consumer demand for premium accommodations. The parent company, ITC, will continue to provide brand support and governance, which should enhance ITC Hotels’ growth prospects while improving ITC’s own return profile post-spin-off of its capital-intensive hotel business.

Despite possible near-term volatility in ITC Hotels shares, experts stay favorable concerning the firm’s long-lasting overview as it strengthens its setting in the friendliness industry.