ITC shares fell by over 3% in early trading on May 28 after a massive block deal saw 2.6% of the company’s equity change hands. British American Tobacco (BAT), the company’s largest shareholder, is reportedly behind the deal, offloading around 32 crore shares worth ₹13,334 crore.
The shares were sold at ₹417 apiece—a 4% discount to the previous day’s closing price. At 9:20 a.m., ITC shares were trading at ₹417.6 on the NSE, down 3.8%. This marks BAT’s second such exit move after it sold a 3.5% stake in ITC last year for ₹16,690 crore.
What does this mean for you and me?
For the average investor, this sale sends mixed signals. On one hand, a big-name investor like BAT reducing its stake can create short-term panic and drag the stock price down. On the other, ITC still remains a solid play in India’s consumer sector, with strong FMCG and cigarette businesses.
And BAT isn’t cutting ties completely.
After this sale, BAT will still hold a 23.1% stake in ITC. So, they’re not walking away—they’re just cashing in. The transaction gives BAT the cash cushion it needs to reduce its debt and boost its own shareholder returns.
In their press note, BAT confirmed the possibility of an on-market trade but cautioned that there was “no certainty” on whether the transaction would proceed or its final terms. Source: Moneycontrol
Why now?
According to industry insiders, investment banks Citi and Goldman Sachs are managing the deal. BAT wants to cut debt and add to its ongoing share buyback plan, targeting a total of £1.1 billion in 2025. The ₹13,300 crore raised here goes straight into that strategy.
Tadeu Marroco, CEO of BAT, said, “ITC is a valued associate in an attractive geography. We remain committed to this partnership and believe in India’s long-term growth.”
Classic PR tone—but it makes sense. BAT wants to have its cake (Indian market presence) and eat it too (debt reduction + buybacks).
A financial move wrapped in optics
This isn’t just a sale. It’s a balancing act. BAT needs to show its shareholders it’s serious about deleveraging while still signaling confidence in India’s growth story.
As for ITC, expect the stock to stay in focus. Investors are watching whether this triggers more institutional reshuffling—or if retail buyers see this dip as a discount deal.
Because when a foreign giant pulls ₹13,300 crore out of a stock, India’s D-Street always feels the tremors.
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