British American Tobacco (BAT) has sold a 3.5% stake in ITC.
- The stake has been sold in a block deal. BAT has realised a total of Rs 17,491 crore from the sale.
- The transaction has taken place @ Rs 400/ share which is similar to the prevailing market price.
- Post this stake sale, BAT’s shareholding in ITC will reduce from 29% to 25.5%.
- BAT is unlikely to sell more shares in the near future as it doesn’t want its shareholding in ITC to fall below 25%.
- It has sold ITC stake to buyback it’s own shares.
- The company plans to buy back its shares over a period ending December 2025, it said in a statement, starting with 700 mn pounds worth in 2024.
Stake sale by BAT is short term positive for ITC.
- It removes the overhang of supply as BAT’s stake sale plan was well known.
- It increase the free float of ITC’s shares, increasing it’s weightage in the index.
Fundamentally though nothing has changed for ITC because of the stake sale.
A total of 173 different funds picked up BAT’s stake. Huge demand ensured that BAT got the upper band of the price it wanted.
Of 43.68 crore shares offloaded by BAT, The government of Singapore was the largest buyer, scooping up 9.15 crore shares which translates to a 0.7 per cent stake in ITC.
In addition, Monetary Authority of Singapore also picked up 1.19 crore shares in ITC.
ICICI Prudential Mutual Fund was the biggest buyer among the domestic institutions, picking up 5.19 crore shares, according to data available on the stock exchanges.
The other prominent buyers were BOFA Securities Europe SA, Societe Generale, Citigroup Global Markets Mauritius Pvt Ltd, Morgan Stanley Asia Singapore PTE, Capital Income Builder, Copthall Mauritius Investment Ltd, Ghisallo Master Fund LP, Capital Worlds Growth and Income Fund among others.