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ITC Share Price: BAT plans to dilute approximately 2.3% of its holding in ITC through this transaction, the company disclosed
ITC Share Price
ITC Share Price: Shares of ITC Ltd are expected to remain in focus as British American Tobacco (BAT), the London-based global tobacco giant and ITC’s largest shareholder, is preparing to offload another portion of its stake in the Indian conglomerate via a block deal, sources told Moneycontrol.
BAT plans to dilute approximately 2.3 per cent of its holding in ITC through this transaction, the company disclosed. “Investment banks Citi and Goldman Sachs are working on the proposed transaction,” an industry source familiar with the development told Moneycontrol. “At a floor price of Rs 400 per share, the size of the deal is estimated to be around Rs 1.36 billion,” another source added.
According to BAT’s disclosure, the proposed transaction aims to provide the company with greater financial flexibility, supporting its strategy to invest in business transformation, reduce debt, and maintain sustainable shareholder returns. The proceeds will help BAT move within its target leverage range of 2–2.5x adjusted net debt to adjusted EBITDA (excluding Canada) by the end of 2026 and enable an increase in its share buyback programme, raising the 2025 target by £200 million to a total of £1.1 billion.
BAT, which first invested in ITC in the early 20th century, has maintained a long-standing and mutually beneficial relationship with the company. Even after the sale, BAT will remain a key stakeholder, retaining an estimated 23.1 per cent stake in ITC.
“ITC is a valued associate of BAT in an attractive geography with long-term growth potential where BAT benefits from exposure to the world’s most populous market,” BAT CEO Tadeu Marroco said in a statement. “While this transaction supports delivery on our commitments to BAT shareholders, we continue to view ITC as a core strategic component of our global footprint as we partner on business opportunities in India. I am confident that ITC, under the stewardship of its current management, will continue to create further value for its shareholders.”
Marroco had previously told analysts during a post-earnings call in February 2024 that local regulations required BAT to maintain a minimum 25 per cent stake in ITC to retain veto rights, noting that the company’s holding was over 29 percent at the time, giving it room to reduce its shareholding.
In March, BAT sold 436.9 million shares—approximately 3.5 per cent stake in ITC—for about $2.1 billion, marking one of India’s largest-ever block deals.
BAT also holds around a 15 per cent stake in ITC Hotels, the demerged hospitality entity, as of December 2024.
Shares of ITC Ltd closed 2.01 per cent lower on May 27.
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