How is ITC hotels average buy price calculated by Zerodha team? Can someone statue the logic here?
Hi @Karthik_Ragu
As you’re aware, ITC Ltd. has undergone a demerger. At Zerodha, we use the Cost of Acquisition (COA) provided by the company to allocate the invested value between the demerged entity (ITC Ltd.) and the resulting entity (ITC Hotels Ltd.). Let’s understand how this works with an example.
ITC Ltd. has stated the following Cost of Acquisition for the demerger:
The share entitlement ratio is 1:10 meaning for every 10 shares of ITC Ltd. held on the record date (January 6, 2025), shareholders receive 1 share of ITC Hotels Ltd.
Say you had purchased 100 shares of ITC Ltd. in 2 instances before the record date.
- Your total investment: ₹43,750
- Your buy average: ₹437.50 per share
- Based on the entitlement ratio, you would receive 10 shares of ITC Hotels Ltd. for your 100 ITC Ltd. shares.
The invested amount is then apportioned between the 100 shares of ITC Ltd. and 10 shares of ITC Hotels Ltd. according to the COA%. Here’s how:
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Thanks. One question - Why is the date of acquisition added as 2/22. We got the ITC hotels share much earlier. Wouldn’t this affect the LTCG gains calculation on console?
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For demergers, the acquisition date of the demerged company will be treated as the acquisition date of the resulting company (ITC Hotels Ltd.). We are currently updating the acquisition date in the breakdown for ITC Hotels shares received through the demerger, which may take a few days. In the meantime, you can create a support ticket here to have the holdings date updated to match the parent company’s acquisition date.
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Hi @Shiv_Chatterjee
While ITC Hotels Ltd. has been updated as per the COA, ITC Ltd. has also been adjusted accordingly. The invested amount and buy average displayed for ITC reflect the post-demerger adjustments. Can you create a ticket here so that we can share the exact break-up?
@Ruchi_Porwal Thx but opening a ticket is impossible now as zerodha rejects stating poor connectivity issue.
However net is working fine for all other apps.
Zerodha is getting frustrated day by day.#kamath brothers busy in taking interview where as the basics are lacking the glitter.
@Shiv_Chatterjee Sorry to hear this. Can you please DM me your client ID? We’ll have this checked and clarified.