ITC Hotels Removed from BSE and NSE Indices After Volatile Trading Debut

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ITC Hotels has been officially removed from the BSE Sensex and 22 other indices, effective February 5, 2025.

The decision came after the stock failed to hit the lower circuit limit by the cut-off time of 2 PM on February 4, leading to its exclusion from the indices before markets opened on Wednesday.

The hospitality company, spun off from ITC Ltd and listed as a separate entity on January 29, 2025, was temporarily included in these indices to assist passive funds with portfolio rebalancing.

However, its removal has triggered significant selling pressure, with index trackers offloading shares worth over ₹400 crore.

An additional ₹700 crore worth of shares is expected to be sold following its exclusion from the NSE Nifty.

At the close of trading on February 4, ITC Hotels’ shares were priced at ₹165, marking a decline of 4.16%.

Since its debut, where it listed at ₹180 on the NSE and ₹188 on the BSE, the company’s market capitalization has dropped from ₹39,126.02 crore to approximately ₹34,266.48 crore.

The demerger structure allowed ITC Ltd to retain a 40% stake in ITC Hotels while distributing the remaining 60% to its shareholders in a ratio of 10:1.

Despite recent volatility in share prices, analysts remain optimistic about ITC Hotels’ long-term prospects.

They cite strong operational performance and brand equity inherited from its parent company as key factors that could drive growth in India’s expanding hospitality sector.

The removal of ITC Hotels from major indices marks a significant development for investors and signals a period of adjustment for the newly listed entity as it navigates its position in the competitive market.

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