The Government is not planning to sell its stake under the Specified Undertaking of the Unit Trust of India (SUUTI) in ITC as of now, the Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey told CNBC-TV18 on March 13.
As on December 31, 2023, SUUTI held around 7.82% stake in the cigarettes-to-hotels conglomerate ITC.
SUUTI last pared stake in ITC in February 2017, when 2% equity was sold at a price of ₹291.95 per share. The number of shares that SUUTI has held in ITC has remained consistent over the last few years.
In a huge pre-market block deal on Wednesday, 43.7 crore shares of ITC, valued at ₹17,491 crore, changed hands, constituting 3.5% of the company's total equity. Shares were traded at an average price of ₹400.4 each.
While buyers and sellers in the transaction are not officially available on the exchanges immediately, BAT, ITC's largest shareholder launched a book on Tuesday evening to sell a 3.5% stake in the company.
Based on the December quarter shareholding pattern, BAT held a 29% stake in ITC. Post this stake sale, BAT will hold a 25.5% stake in the company.
Additionally, BAT will have a 180-day lock-up for any further stake sale in ITC. However, they have continued to specify that they do not intend to bring their stake in ITC below 25%, as it gives them veto rights.
BAT plans to utilise these proceeds to repurchase their shares.
Amidst the stake sale, brokerages CLSA and HSBC have upgraded their recommendations on ITC to "buy," calling the correction in ITC an attractive buying opportunity.
Sources have told CNBC Awaaz that GIC Singapore, Capital International, along with domestic funds like ICICI Prudential and Aditya Birla Sun Life are likely to be the buyers in this transaction.
Shares of ITC gained as much as 8.3% in early trading on Wednesday to ₹438, marking its biggest single-day gain since September 2021.
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