ITC Block Deal: Stock gains 6% after BAT sells shares worth ₹17,491 crore
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.
In a huge pre-market block deal, 43.7 crore shares of ITC Ltd., the cigarettes-to-hotels conglomerate, 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.
First Published: Mar 13, 2024 8:54 AM IST
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