ITC shares decline amidst British American Tobacco's stake sale plans

ITC, one of India's leading conglomerates, witnessed a sharp decline in its share price by over 2% amidst reports of British American Tobacco Plc (BAT) contemplating the sale of a portion of its stake in the company. The London-based BAT has been engaged in discussions with Bank of America Corp. and Citigroup Inc. regarding the potential divestment of ITC shares valued at approximately $2 billion to $3 billion through block trades.

This news comes against the backdrop of ITC's shares experiencing a 13% slump since the onset of 2024, following a remarkable surge over the preceding two years.

BAT, which currently holds a 29% stake in ITC, confirmed its deliberation on the potential sale of a "small part" of its shareholding through an on-market block trade. However, the tobacco giant emphasized the absence of certainty regarding the terms of any forthcoming transaction or its eventual execution.

Notably, an anonymous large trade involving 12 million ITC equity shares, constituting a 0.09% stake, transpired on March 11, with the identities of the parties involved remaining undisclosed. BAT's intention to reduce its stake in ITC was publicly disclosed in February, with the company actively pursuing strategies to achieve this objective.

Typically, such divestment deals are executed at a discount relative to prevailing market prices. The specifics of the transaction are subject to alteration, with the launch of the offering potentially extending into the following week, contingent upon prevailing market conditions.

Following the Bloomberg report, BAT shares witnessed a 1.4% uptick at the close of trading on Monday in London. Meanwhile, ITC shares continued to trade lower, experiencing a 2.33% decline to ₹399.85 apiece on the BSE at 9:30 am.