The Centre may not offload a portion of its stake in ITC held through the Specified Undertaking of the Unit Trust of India (SUUTI) in the current financial year, sources told FE. In terms of value, the ITC stake is the prized holding of SUUTI as its 7.87% equity at the current market price is worth about Rs 33,570 crore.

The Centre has garnered Rs 3,839 crore by selling the Specified Undertaking of the Unit Trust of India (SUUTI)’s entire 1.55% stake in Axis Bank on November 10-11 through an offer for sale.

With this transaction, the government’s disinvestment proceeds stood at Rs 28,400 crore or 44% of the FY23 disinvestment revenue target of Rs 65,000 crore.

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The ITC share price at Rs 343.65 on Wednesday was ruling close to the 52-week high of Rs 361.9. A stake sale in the company could have fetched a tidy sum to take the disinvestment receipts close to the target of Rs 65,000 crore.

In February 2017, the government had sold a 2% stake from SUUTI’s holding in ITC to mobilise about `6,700 crore. Thereafter, it hasn’t reduced much stake in the company, with diversified presence across segments like FMCG, hotels, software, packaging etc.

While officials did not disclose the reasons for not divesting a stake in the company for now, analysts say it could be due to the likely de-merger of the conglomerate into several distinct entities that could help it realise more value for its stake.

The stock has become an outperformer in the last six months after remaining muted in the 2-3 years before that, founder of Equinomics G.Chokkalingam said.

gI believe that chances are high that the government may sell a stake in ITC before March 2023…Or it may wait for a decision by the company management on the demerger of businesses and create more value. That is also possible,” Chokkalingam said.

For quite some time ITC has been exploring the demerger plan of its hotel and infotech business from the tobacco business.

Currently, domestic insurance companies including LIC hold 20.72% of ITC while foreign direct investment is at 29.21% (Rothmans International Enterprises Limited, Myddleton Investment Company Limited and Tobacco Manufacturers (India) Limited).

With most other key disinvestment proposals such as strategic disinvestment of IDBI Bank likely to materialise in FY24, the government is banking on a plan to sell a stake in Hindustan Zinc that could fetch it a decent sum in the current fiscal. Its residual 29.54% stake in HZL, an integrated miner and producer of non-ferrous metals, including zinc, lead, silver and cadmium is worth about Rs 40,000 crore at current market prices.