The much-awaited demerger of ITC’s hotel business is finally here! Starting today, ITC Hotels will operate as a separately listed company, marking a historic shift for the tobacco-to-hospitality conglomerate. As per the demerger scheme, ITC shareholders whose names appear in the company’s records by the record date of January 6th will receive one share of ITC Hotels for every 10 shares of ITC held. ITC will retain 40% ownership in ITC Hotels, while shareholders will hold the remaining 60%. Additionally, ITC will transfer ₹1,500 crores in cash and equivalents to ITC Hotels, aimed at supporting growth and contingency requirements. The newly formed ITC Hotels is expected to list on the stock exchanges within 60 days of the NCLT order dated December 16th. The fair value of ITC Hotels’ shares will be determined as of January 6th. What should investors do? KKunal V. Parar, Vice President of Technical Research at Choice Equity Broking, advises creating a long-term position in ITC. He highlights two key reasons: 1️⃣ Improved Valuation: Individual businesses, when separated, can be valued based on their specific growth potential and profitability, unlike being bundled with other segments. 2️⃣ Focused Growth: Independent management and resources will allow ITC Hotels to tailor growth strategies to its unique needs, unlocking substantial value for ITC investors. KKunal V. Parar emphasises that the hospitality sector has witnessed significant momentum in stocks like Chalet Hotels and Indian Hotels, and this move positions ITC Hotels to achieve similar growth in the medium to long term. If you already own ITC shares, hold onto them, and if you’re considering investing, this is a promising opportunity to benefit from value unlocking. Stay tuned for more updates on ITC Hotels' listing and market performance!