ITC Share Block Deal: A big block deal is going to happen in FMCG and cigarette manufacturing company ITC Limited in the trading session on Wednesday. British American Tobacco is going to sell 3.5 percent stake in ITC through a block deal. British American Tobacco (BAT) is going to raise $ 2.1 billion (Rs 16775 crore) by selling stake in ITC in this mega block deal.
British American Tobacco will sell its stake in ITC in a block deal at a price band of Rs 384 – 400.25 per share under the book building process. Investors bidding to buy shares according to the lower end of this price band are being given a discount of 5 percent. After the sale of this stake, British American Tobacco's stake in ITC will come down to 25.5 percent from the current 29 percent. After selling ITC shares in a block deal, British American Tobacco will not sell any stake in the company again for 180 days.
Ever since the news of sale of stake in ITC came to light, there has been a decline in the stock of ITC. Even on Tuesday, March 12, 2024, ITC shares closed at Rs 404.45 with a fall of 1.21 percent. Tadeu Marocco, CEO of British American Tobacco, said, we will continue to be a significant shareholder of ITC as ITC continues to grow. With the money raised by selling its stake in ITC, British American Tobacco will buyback its own stake by December 2025, starting with 700 million pounds in 2024. British American Tobacco has hired Bank of America and Citigroup to sell shares. British American Tobacco has invested in ITC since the early 1900s.
In the last few years, ITC has given excellent returns to its investors. On March 14, 2022, the stock fell to Rs 235. From there the stock gave strong returns and in July 2023 the share reached Rs 499.70 from around Rs 500.
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