ITC shares drop over 2% amid reports over largest shareholder offloading stake via bulk deal

Shares of hotels-to-cigarette conglomerate ITC Ltd declined more than 2% to fall below the ₹400 level on Tuesday for the first time in more than three weeks, amid reports that its largest public shareholder, British American Tobacco (BAT), is looking to pare its stake this week through large deals.

ITC shares declined as much as 2.45% to hit a low of ₹399.35 per piece on NSE in the first half of trade on Tuesday. This is for the first time the stock slipped below the ₹400 mark since February 16 this year and the second time since April 2023.

The stock was trading 1.95% lower at ₹401.4 apiece on NSE at 1:20 pm.

According to reports, ITC’s largest public shareholder British American Tobacco (BAT) is looking to divest a part of its shareholding in the Indian FMCG giant.

The media reports suggested that BAT has onboarded Bank of America, Citigroup and other Wall Street majors to sell its stake worth around $2.5 billion through block deals.

Tobacco giant BAT holds around 29% shareholding in ITC through three of its group entities. Last month, BAT revealed its plans to pare stake in ITC to improve balance sheet flexibility.

Analysts, however, believe that BAT paring its stake is unlikely to impact the fundamentals of the Indian tobacco major but the stock reaction might be due to concerns over increased supply of shares in the market post block deals.

ITC shares have declined more than 10% in the past six months while around 1% in the past month.

The reports follow large trade deals in ITC wherein around 1.2 crore shares or 0.9% of equity changed hands on Monday. ITC shares declined around 1% on Monday, March 11.

ITC reported a 2% growth in its consolidated revenue to ₹19,337 crore for the December quarter against ₹18901 crore in the year ago quarter. Profit after tax rose by 10.5% to ₹5,572 crore in the quarter over the last year