Daijiworld Media Network – New Delhi
New Delhi, May 28: In a jolt to Dalal Street, ITC shares plunged over 5% in early trade on Wednesday after reports surfaced that British American Tobacco (BAT), the largest stakeholder in the FMCG-to-tobacco major, is planning a Rs 11,600 crore ($1.4 billion) stake sale via a block deal.
At the opening bell, ITC shares fell 4.33% to Rs 415.10 on the Bombay Stock Exchange (BSE) and slipped 4.81% to Rs 413 on the National Stock Exchange (NSE), making it the biggest drag on the BSE Sensex.
The transaction, routed through BAT's wholly owned arm Tobacco Manufacturers (India) Ltd, will reduce its stake in ITC from 25.44% to 23.1%. The shares are being offered at a floor price of Rs 400 apiece, marking a 7.8% discount from ITC’s last closing price on May 27.
Market expert VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented, “BAT's decision to sell a 2.3% stake in ITC will keep the stock subdued for the near term.”
The sell-off is part of BAT’s larger strategic move to enhance financial agility, reduce debt, and bolster its global share buyback initiative. The development also reshapes ITC’s shareholder structure — public sector insurers and SUUTI (Specified Undertaking of the Unit Trust of India) will now collectively emerge as the largest shareholder group with a 26.5% stake.
The broader equity markets reflected the negative sentiment. The BSE Sensex dropped 200 points to 81,351.31, while the Nifty slipped 61 points to 24,765, weighed down not just by ITC, but also by declines in other index heavyweights like Reliance, Maruti Suzuki, and Titan.
BAT, a global consumer goods behemoth, continues to shift its focus from traditional cigarettes to newer, multi-category nicotine delivery products, including vapour brand Vuse, heated tobacco product 'glo', and nicotine pouch brand Velo.
Market analysts anticipate that while the stock may remain under pressure in the short term, institutional interest in ITC remains strong, especially given its diversified business model and robust fundamentals in the FMCG and hospitality sectors.