ITC Hotels drops in India trading debut, valued at $4.2 billion

Photo: Reuters

Shares of ITC Hotels, a luxury hotel operator, fell in its debut trade on Wednesday after being spun off from the ITC group, which is known for its consumer goods. The company’s market value reached 366.2 billion rupees, or about $4.23 billion.

On the first day of trading, ITC Hotels' stock dropped to 172 rupees, lower than the price of 180 rupees set before the market opened. By the end of the day, the stock had fallen by 2.2%, closing at 176 rupees.

The ITC group, which owns a 40% stake in ITC Hotels, decided to separate its hotel business to focus more on its core sectors of cigarettes and food, which are larger and bring in more revenue. The hotel division, which has a lot of costs to run, is one of the smaller parts of the ITC business.

Even though ITC Hotels' debut was expected to perform in this way, there is some pressure on the stock. The company is being removed from important stock market indices like Nifty 50, Nifty FMCG, and BSE Sensex. This has led to some selling of its shares. Financial analysts predict that there could be around $190 million to $200 million in outflows after the listing.

Meanwhile, competitors in the hotel industry, like EIH (which runs the Oberoi brand) and Indian Hotels (which owns the Taj brand), saw their stocks go up by around 2%.
Although ITC Hotels had a rough start in the stock market, it is still the second-largest luxury hotel company in India in terms of market value. The leader in this market is Indian Hotels, which is valued at 1.08 trillion rupees. EIH, which owns Oberoi hotels, is worth about 222.67 billion rupees.

ITC Hotels is joining the stock market at a time when many rich Indians are spending more on luxury products such as cars, watches, and even high-end apartments. The company operates over 140 properties in India, Nepal, and Sri Lanka, offering high-end services like private swimming pools, jacuzzis, and desert safaris.
According to predictions, India’s luxury hotel market will grow from $2.99 billion in 2025 to $4.83 billion by 2030.

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