BAT’s stake sale in ITC to trigger $50 million inflows as Sensex adjustment comes into effect: Nuvama
ITC's weight will go up in the S&P BSE Sensex, resulting in likely inflows of $50 million, according to estimates by Nuvama. Today, Sensex will adjust ITC's free float factor as a result of British American Tobacco's (BAT) 3.5% stake sale in the company.
Meanwhile, the adjustment on Nifty will be done during the rejig exercise on March 27. Nuvama anticipates a $70 million inflow.
On March 13, the London-based company sold shares at an average selling price of Rs 404.40 per share in block deals to institutional investors. The stake sale was worth about Rs 17,500 crore. BAT, which makes Dunhill and Lucky Strike cigarettes, sold 43.68 crore shares after which its shareholding in ITC fell down to 25.5% from 29%. The company will use proceeds from the stake sale to buyback BAT shares. It had hired BofA Securities and Citigroup to handle it.
Nuvama sees no impact of BAT's stake sale on global indices. As global index providers MSCI and FTSE are already utilising 24% as the float, which represents the maximum foreign ownership limit, any weight increase in global passive indices is not anticipated, this brokerage said.
Also Read: HCL Tech, TCS, Infosys, other IT stocks drop up to 5%. Blame it on AccentureToday, the stock jumped 1.5% to the day's high of Rs 427.75 on the NSE. The shares of ITC have given returns of over 13% in the past 12 months, an underperformance versus Nifty50. The latter has delivered an impressive 29% returns during this period.
The diversified conglomerate had reported a 6% growth in its
