Hospitality giant ITC Hotels becomes second most valued hotel stock

Spun-off unit to open 200 hotels in five years

ITC Hotels, the spun-off hospitality arm of ITC, listed separately on Wednesday, commanding a market value of Rs 36,139 crore, making it the second most valuable listed hotel firm.

 

Its shares ended at Rs 174 on the NSE, after hitting a high of Rs 180 and a low of Rs 171, with Rs 439 crore worth of shares changing hands.

 

ITC, which retains a 40 per cent stake in ITC Hotels, ended 0.51 per cent lower at Rs 433 on the NSE, valuing the tobacco-to-fast moving consumer goods (FMCG) conglomerate at Rs 5.42 trillion.

 

In the listed space, ITC Hotels has displaced East India Hotels (EIH), the hospitality arm of the Oberoi group, to be the second most valuable hotel stock. Indian Hotels, the parent company of Taj Hotels, is still the most valuable hotel stock with a market capitalisation of Rs 1.11 trillion.

 

ITC Hotels plans to expand its portfolio to over 200 hotels, with more than 18,000 keys over the next five years, having approximately two-thirds salience of managed properties, ITC Hotels said in a statement. It has launched 30 hotels in the last 24 months ending on December 31, and expects to add one hotel a month in the next 24 months on average. 

 

Currently, ITC Hotels is present through six brands — ITC Hotels and Mementos in the luxury space, Welcomhotel in the upper upscale, Storii in the boutique premium experiential segment, Fortune in the midscale, and WelcomHeritage in the heritage leisure. The company operates 140 properties with over 13,000 keys in over 90 locations.

 

“Listing of ITC Hotels marks not just a new chapter for the ITC group’s hospitality business but a bold step forward in our commitment to creating enduring value for all stakeholders,” said Sanjiv Puri, chairman, ITC Hotels, in its statement. “As ITC Hotels embarks on this new journey, it is committed to achieving new global benchmarks in hospitality while staying rooted in its vision of sustainability and inclusivity,” the statement added.

 

The company stated that it has a debt-free balance sheet with Rs 1,500 crore in cash and equivalents to cater to planned growth and contingency requirements.

 

“The demerger of ITC Hotels is a bold move by ITC, aimed at unlocking value and propelling growth in the hospitality sector,” said Nimish Maheshwari, an independent equity analyst, in a note. He further added that while challenges and uncertainties exist, the strategic rationale behind the demerger, coupled with the favourable industry outlook and ITC Hotels' growth plans, points towards a promising future.

 

It is present in select international locations like Colombo (ITC Ratnadipa), and Bhaktapur in Nepal (Fortune Resort, and Wellness Spa). It will soon launch a Welcomhotel in Nepal, as per the statement.

 

“As we look ahead, ITC Hotels is ready to take bold strides as an independent, agile and pure-play hospitality entity,” said Anil Chadha, managing director, ITC Hotels, in a statement. “We aim to be a global leader in Indian hospitality driven by our core ethos of customer centricity, high performance, and steadfast commitment to sustainability,” the statement said.