ITC price, volumes rise; board to take up merger with Bhadra today

Our Markets Bureau

Mumbai, Sept 20: The board of directors of tobacco major ITC Ltd is scheduled to meet on Friday to consider the merger of ITC Bhadrachalam. Last month, ITC had announced its plans to merge its paper subsidiary, where the tobacco major holds 61 per cent equity.

Even when the analysts and observers had earlier indicated that this merger would be a drag on the profitable ITC, the stock on Thursday closed at Rs 642.40 from its Wednesday’s close of Rs 635.50 on The Stock Exchange, Mumbai.

There was hectic trading and huge volumes on the ITC counter that helped the sliding stock climb from earlier low levels. The ITC stock on Thursday slipped to its day’s low of Rs 617 only to bounce back sharply. Repetitive buying saw the counter log a huge volume of 5.76 lakh shares followed by an increase in price. The counter recorded a high of Rs 652 before settling at Rs 642 for the day.

However, the ITC Bhadrachalam counter was subdued with trading of just 4000 shares owing to the fact that the swap ratio is more likely to be unfavourable for its shareholders. The share price was range bound and after sliding to Rs 39.30, the counter close the day at Rs 41.50.

Traders say that there is limited upside in the ITC Bhadrachalam counter given the fact that the company has lined up massive development and has no fund to support it.