ITC stock tumbles 2% as BAT prepares to offload stake

12 Mar 2024 , 10:54 AM

British American Tobacco (BAT) is reportedly getting ready to sell off a piece of its investment as soon as this week, which is why ITC shares fell in early trade on March 12.

The largest shareholder in ITC, BAT, with its headquarters in London, has reportedly approached Wall Street giants including Citigroup and Bank of America to sell shares valued at approximately $2.5 billion through a block sale.

ITC shares were trading at ₹401.4 on the NSE at 10:31 am, down 2% from the closing price of the previous session.

These transactions are frequently carried out below the going rate in the market. The transaction’s specifics could yet alter, according to Bloomberg, and depending on the state of the market, the offering’s launch could extend into next week.

ITC-tracking analysts and traders stated that while the proposed stake sale does not alter the underlying picture, it may short-term pressure the stock due to an excess supply.

Tadeu Marroco, the CEO of BAT, stated in December that the process of selling ITC’s shares is quite complex. “Any action regarding our stake requires specific approvals from the RBI, which adds a significant amount of additional bureaucracy,” he stated. The CEO claimed that as a result, “the universe of buyers is limited” for ITC shares.

ITC’s stock fell 1.05% to ₹409.2 on the NSE on March 11. ITC’s shares have corrected by 12% so far this year. By contrast, during the same period, the Nifty 50 stock index has increased by about 3%.

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