ITC shares fall after report says government may sell stake in cigarette maker

The government, through Specified Undertaking of the Unit Trust of India, holds 7.92 percent stake in the fast-moving consumer goods company.

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Delay in the strategic sale of Pawan Hans, Shipping Corporation of India, IDBI Bank, Bharat Petroleum Corporation and the scaled-down public offer of Life Insurance Corporation of India have forced the government to consider other options, the ET report said.

Details of an offer for sale (OFS) and the extent of divestment are still being worked out and the government expects the process to be completed by September, as per the report.

An analyst from a domestic brokerage firm, requesting anonymity, said that there is nothing much to read here. Today's fall in the stock price was merely a knee-jerk reaction to the news of stake sale, and the impact would only be known once more details on the OFS are available, she said.

This news comes after the FMCG player reported its March quarter earnings last week. ITC reported an impressive revenue growth in the cigarette business. Following a strong set of quarterly numbers and an upbeat commentary, the stock had touched a three-year high.