In a significant market development, ITC Hotels, recently demerged from ITC Ltd, was removed from 22 BSE indices effective February 5. This move follows its temporary inclusion in indices like the Sensex to aid portfolio rebalancing by passive funds.
The demerged entity began trading independently on January 29, debuting at INR 188 per share on the BSE and INR 180 on the NSE, with an initial market valuation of INR 39,126.02 crore. However, the valuation has since dropped to INR 34,266.48 crore.
The exclusion triggered index trackers to offload shares worth over INR 400 crore, with an additional INR 700 crore in selling anticipated upon removal from the NSE Nifty. Shares of ITC Hotels last traded at INR 165, reflecting a 4.16% decline.
Under the demerger terms, ITC Ltd retained a 40% stake in ITC Hotels, with the remaining 60% allocated to ITC shareholders in a 10:1 ratio. The total acquisition cost for 100 shares of ITC Hotels stands at INR 54,040.
