ITC share price falls over 2% as BAT looks to sell a ‘small part’ of its stake as soon as this week

ITC share price fell over 2% in early trade on Monday after reports that British American Tobacco Plc was looking to sale of part of its stake in the Indian partner as soon as this week.

ITC shares fell as much as 2.46% to ₹399.30 apiece on the BSE. ITC share price has dropped over 13% in 2024 so far after more than doubling over the preceding two years.

The London-listed BAT has been in talks with Bank of America Corp. and Citigroup Inc. for the potential divestment of ITC shares worth around $2 billion to $3 billion through block trades, Bloomberg News reported quoting sources.

Also Read: BAT's stake sale in ITC is almost here

In a statement, BAT confirmed that it was evaluating a possible disposal of a “small part” of its ITC shareholding through an on-market block trade. There’s no certainty on the terms of any potential transaction or whether the deal will move ahead, it said.

BAT currently holds 29% stake in the Indian cigarette-to-hotel conglomerate ITC, according to data compiled by Bloomberg.

Meanwhile, around 12 million ITC equity shares, representing a 0.09% stake, changed hands in a large trade on March 11. The identities of the buyers and sellers remain undisclosed.

Read here: Major ITC Equity Shakeup: 12 million shares get reshuffled amid reports of British American Tobacco's divestment plans 

In February, BAT had announced that it was “actively working” to reduce its roughly 29% stake in ITC.

Such deals are usually done at a discount to the market price. Details of the transaction could still change, and the launch of the offering may spill into next week depending on market conditions, the Bloomberg report said quoting people with knowledge of the matter.

BAT shares rose after the Bloomberg News report and were up 1.4% at the close Monday in London. In the past 12 months, BAT shares have fallen 23%. 

At 9:30 am, ITC shares were trading 2.33% lower at ₹399.85 apiece on the BSE.

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(With inputs from Bloomberg)