ITC Hotels Removed From BSE: People thought that ITC Hotels would make a big splash on the stock market, but it has now exited the major indices within days. So, let’s have a deeper look into why ITC Hotels was removed from BSE indices, what it means, and how it fits into the bigger picture.
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The Demerger Gamble
Before this buzz, ITC Hotels was simply the hospitality arm of ITC Ltd. In a bold move, ITC spun off its hotels segment into a separate entity. So, guess what? Shareholders of ITC got one ITC Hotels share for every ten ITC shares they held. This neat little arrangement gave birth to a standalone brand—one that opened at around ₹188 on the BSE.
ITC Hotels Removed: A (Very) Short Stay on the Indices
The big surprise was how quickly ITC Hotels entered and left the Sensex and key BSE indices. Actually, it was part of a temporary arrangement to help index-based funds rebalance their portfolios post-demerger. Once that job was done, the stock was removed—a standard procedure, but it sure made headlines.
- No Lower Circuit? No Problem.
A notice from the BSE stated that if the stock didn’t hit the lower circuit by a specific cutoff time, it would be dropped from all BSE indices. And that’s exactly what happened. - Index Funds Offload
Soon after, index-focused funds had to sell large chunks of ITC Hotels shares, collectively worth hundreds of crores. This sell-off caused immediate price drops—totally normal for a scenario like this.
The Big Question: Should You Worry?
If you’re an investor, you might be thinking, Wait, is this bad news? The short answer: not really. This was largely a technical move—an inevitable part of how indices rebalance after demergers. Meanwhile, if you dig into ITC Hotels’ fundamentals:
- It’s got strong room rates (ARR jumped from ~₹7,900 in FY19 to around ₹12,000 recently).
- It boasts a solid “big brand” reputation tied to ITC.
- It still aims to expand aggressively, with new hotels and properties in the pipeline.
Where Does ITC Hotels Go From Here?
Here’s the exciting part: the fundamentals look solid, and the hospitality market itself is on an upswing. With travel roaring back, ITC Hotels has every chance to prove that the recent index-based sell-off is just a minor bump on a long road to growth.
- Long-Term Focus
In my experience, early price volatility often settles. Investors watch for quarterly numbers, occupancy rates, and real expansion moves—so keep an eye on that. - Brand Strength
The “ITC” brand has proven itself in the FMCG and cigarettes realm for years. The separate listing of ITC Hotels might just free up more focus and capital for each side to grow independently.
Final Thoughts on ITC Hotels Removed From BSE and Sensex
If you’re holding ITC Hotels shares or just curious about how these market mechanics work, relax. Procedural moves can cause short-term swings, but they rarely signal a company’s downfall. Embrace the bigger story here: a newly listed hospitality juggernaut, backed by a powerful parent brand, stepping into the market on its own terms.
Any thoughts on ITC Hotels’ future? I’d love to hear your take—drop a comment or share this post. After all, the more we talk, the better we understand the market’s fascinating twists and turns.
Read more: Why Apple Ditched Intel: TSMC’s Founder Reveals the Hidden Inside Story
FAQ
Why was ITC Hotels removed from BSE indices?
ITC Hotels was temporarily included right after its demerger from ITC Ltd to allow index-based funds to rebalance their portfolios. Once those trades were completed, the stock was removed from BSE indices as part of standard procedure.
What impact did the removal have on the stock price?
The exclusion triggered index-based selling worth hundreds of crores. As a result, ITC Hotels’ share price experienced short-term volatility. However, many analysts believe this situation is procedural rather than a reflection of long-term fundamentals.
How does ITC Ltd still benefit from ITC Hotels after demerger?
Even after the demerger, ITC Ltd retains a 40% stake in ITC Hotels. This shared interest means ITC benefits from the hotel business’ performance while allowing each entity to focus on its unique growth strategy.
