ITC share price jumps over 8%, posts biggest single-day gain since September 2021, as BAT sells 3.5% stake in block deal
₹439.00 apiece on the BSE. Around 43.7 crore ITC shares, amounting to 3.5% of the total equity of the company, changed hands in a block deal that took place in the pre-market block window. The shares were sold at an average price of ₹400.4 apiece, taking the total transaction value to ₹17,491 crore, reports said.
Earlier, BAT said it would sell a 3.5% stake in the Indian cigarettes-to-hotels conglomerate, ITC Ltd, in block deals. Mint had reported that BAT, which holds over 29% of the cigarettes-to-hotels conglomerate, will sell the shares at ₹384–400.25 each, implying a 4–5% discount to ITC’s Tuesday closing price of ₹401.90 on the NSE. Read here: BAT to sell 3.5% in ITC on Wednesday, may raise up to ₹17,480 crore According to a term sheet seen by Mint, the lock-in period for the deal is 180 days.
After the sale, BAT’s shareholding in ITC will be 25.5%. On 9 February, the company told investors that its shareholding would not fall below 25%. “With this transaction, BAT can accelerate the start of a sustainable buyback, while enabling us to continue to deleverage towards a new target range of 2–2.5X adjusted net debt/adjusted EBITDA," said Tadeu Marroco, chief executive of BAT.
He added that BAT looks forward to remaining important shareholders in ITC as it continues its journey of growth. ITC shares have corrected nearly 20% from its peak and are down more than 13% year-to-date (YTD) amidst news of the stake sale by BAT. Analysts believe the drop in ITC shares offers a buying opportunity with attractive valuations.
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