ITC shares down 20% from peak amidst potential BAT block deal

CNBC-TV18 was the first to report on February 8 that BAT, the largest ITC shareholder is looking to monetise some of its stake. BAT had said that they have significant shareholding in ITC and it offers an opportunity to release and reallocate some capital.

"We have been actively working for some time on completing the regulatory process required to give us the flexibility to monetise some of our shareholding and will update you at the earliest opportunity," the BAT release said.

BAT has been a shareholder in ITC in some or the other way since the early 1900s and has been subject to numerous share capital changes and regulatory restrictions.

ITC was also part of CNBC-TV18's Dealing Room Chatter on Monday, where it was reported that a large block deal is likely to take place in the stock soon.

In a note on February 29, brokerage firm Goldman Sachs wrote that weak near-term earnings and an overhang from the BAT stake sale have been the key drivers behind the correction in ITC's stock price.

Goldman Sachs mentioned that while the cigarette volumes may recover in the March quarter, the paper business may turn out to be a near-term earnings drag, and a potential recovery is likely only in the September quarter of financial year 2025.

Shares of ITC are currently trading 1.8% lower at ₹401.95. The stock is trading below all of its key moving averages and is down 14% so far this year.