Big guns BAT for ITC’s 3.5% stake, pay 17,500 crore

Mar13,2024


Mumbai: Almost every reputed foreign and domestic fund jumped in to grab a share of 3.5%. bet He British American Tobacco Domestic tobacco-to-FMCG is sold in major ITC Wednesday morning. About 43.7 crore ITC shares offered by the UK-based global tobacco giant were bought by 173 different funds, according to BSE's block and bulk deal data for the day.
The huge demand helped BAT raise about Rs 17,500 crore (about $2.1 billion), which is about Rs 700 crore ($80 million) more than the Rs 16,800 crore ($2 billion) it initially sought to raise. Had set a target. BAT holds 43.7 crore ITC share blocks. At the upper end of the Rs 384-400.25 price band, per share was sold at an average price of Rs 400.25.

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The Singapore government was the biggest buyer of the block, buying about 9.2 crore ITC shares, BSE data showed. other notables foreign funds This includes Goldman Sachs, HSBC, Blackstone, Aberdeen, The World Bank, Citigroup, Morgan Stanley, Capital Group, People's Bank of China and many others. Domestic funds included SBI MF, HDFC MF, Birla MF, Kotak MF, HDFC Life Insurance, I-Pru Life Insurance and others.
Block trades are usually made at a discount to the market price. However, given the strong demand for ITC shares from institutional investors, these blocks were sold at the upper end of the price band. As a result, soon block deal Completed, ITC shares rose more than 5% despite a selloff in the market on Wednesday, and closed the day at Rs 422, up 4.5%.
London-based BAT had jointly ordered BofA Securities India and Citigroup Global Markets India to sell the block. On Tuesday, BAT had announced that once it sells part of its stake in ITC, it will “remain a significant shareholder of ITC with an approximately 25.5% stake.” The UK company intends to use a part of the proceeds from ITC's stake sale to pay dividends this year and next.
As of December 2023, BAT held just over 29% stake in ITC. After this stake sale, its stake will reduce to 25.5%. For about 3-4 months, BAT's top management has been talking about monetizing a part of the British MNC's stake in ITC, provided it can successfully bypass India's stringent foreign holding rules in tobacco companies. From the very beginning, BAT had indicated that its stake in ITC would not fall below the strategically important 25% mark.
Last year, ITC had announced that it would spin off its hotel business. At Rs 17,500 crore, this block deal in ITC is now the biggest in 2024 and one of the biggest in the history of the Indian stock market.



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