ITC shares dropped nearly 4% in early trade today, May 28, as British American Tobacco (BAT) gears up to offload a 2.3% stake in the company through a mega block deal. The Rs 11,600 crore transaction is expected to make headlines, drawing attention to one of India’s biggest names in the FMCG and cigarette space.
A big deal?
BAT is offering nearly 29 crore shares in ITC at a floor price of Rs 400 each, a discount of around 8% to the company’s last traded price of Rs 434.70 on Tuesday. The block deal will be executed via an accelerated book-build process, with institutional investors in focus.
Citi and Goldman Sachs are the lead investment banks managing the sale, which is likely to be completed ahead of market hours.
BAT’s continued exit strategy
This recent move comes over a year after BAT sold a 3.5% stake in ITC, raising close to Rs 16,700 crore in one of India’s largest ever block deals. With this second leg of stake reduction, BAT’s holding in ITC will drop from 25.4% to approximately 23.1%. However, it is worth noting that, despite this stake reduction, it will still continue to be ITC’s largest shareholder.
Why the stake sale now?
BAT is not exiting ITC entirely. It is recalibrating its global portfolio. The proceeds from this sale will help the company reduce debt and move closer to its target leverage ratio of 2–2.5x adjusted net debt to EBITDA by the end of 2026.
In addition to this, BAT is planning to boost its share buyback program by 200 million pound, taking the total to 1.1 billion pound for 2025.
While BAT trims its stake, the company reaffirmed its confidence in ITC’s future. CEO Tadeu Marroco called ITC “a valued associate in an attractive geography,” adding that BAT intends to maintain its strategic partnership in India, which is the world’s most populous market.
He said, “We continue to view ITC as a core strategic component of our global footprint. I am confident ITC will keep creating value under its current management.”
ITC share price
ITC’s share price has been mixed over different time frames. Over the past five days, the stock has seen a slight decline. On a monthly basis, however, it has edged up by around 1%. Looking at a longer horizon, the stock dipped 8% over the past six months but managed to post a 1% gain over the last one year. So far in 2025, ITC shares are down nearly 10%. The company currently holds a market capitalisation of Rs 5.43 lakh crore. Its 52-week high stands at Rs 528.50 per share, while the 52-week low is Rs 390.15.