ITC Hotels dropped from BSE Sensex ahead of trading

ITC Hotels Ltd has been removed from the BSE Sensex and 22 other BSE indices effective February 5, 2025, prior to market opening. The shares are now trading at ₹167.05 up by ₹2.40 or 1.46 per cent on the BSE at 11.09 am.

The hotel chain’s shares, which last traded at ₹165, saw a 4.16 per cent decline before the announcement.

The exclusion is triggering significant selling pressure, with index funds offloading shares worth over ₹400 crore. An additional ₹700 crore in selling is expected following its anticipated removal from the NSE Nifty.

The company, recently demerged from ITC Ltd, had listed on January 29, 2025, at ₹180 on NSE and ₹188 on BSE, marking a 31 per cent discount from its implied price of ₹260. Under the demerger structure, ITC retained a 40 per cent stake while 60 per cent was distributed to ITC shareholders in a 10:1 ratio.

Despite challenging market conditions, ITC Hotels has shown strong operational metrics. Its Average Room Rate increased from ₹7,900 in FY19 to ₹12,000 in FY24, representing a CAGR of 8.7 per cent. Revenue Per Available Room also improved from ₹5,200 to ₹8,200 during the same period.

The company’s market valuation has decreased from ₹39,126.02 crore at listing to ₹34,266.48 crore. Room sales contribute 52 per cent of total revenue, with food and beverage accounting for 40 per cent.