ITC share price falls 4% on likely ₹14,000 crore stake sale by BAT via block deals
ITC block deal: Shares of ITC Limited declined 4% in early trade on Wednesday, May 28, following multiple block deals in the counter, wherein British American Tobacco (BAT) likely offloaded a 2.6% stake in the diversified conglomerate, worth nearly ₹ 14,000 crore.
According to media reports, 33.25 crore shares, representing a 2.57% stake in ITC, changed hands via six block deals at ₹ 417 apiece, amounting to approximately ₹ 13,900 crore. However, the official details of the parties involved in the block deal will likely be known post-market trading hours today.
This block deal size was higher than the 2.3% stake BAT said it intended to sell. Despite the stake sale, BAT will remain ITC's largest investor post-disposal, with a 23.1% stake.
A Reuters report on Tuesday said BAT is selling up to 290 million shares in the deal, at a floor price of ₹ 400, a discount of 7.8% to ITC stock's closing price.
The London-based cigarette maker had offloaded 436.9 million shares, or roughly 3.5% of ITC's outstanding shares, for about $2 billion last year, in what was India's third-largest block deal ever, as per Reuters.
The company, earlier this month, along with its Q4 results, had announced a dividend, for which it had fixed May 28 as the record date.
The record date helps determine the entitlement of the members for a corporate action undertaken by the company.
To be eligible for the dividend, ITC shareholders should have purchased the stock a day prior, as the Indian stock market follows a T+1 settlement system.
According to Harshal Dasani, research analyst at INVasset PMS, the ITC block deal has opened a long-term accumulation window.
ITC stock price chart
'ITC witnessed a ₹ 13,863 crore block deal as BAT sold a 2.57% stake at ₹ 417, triggering a temporary price dip. The stock closed at ₹ 402.20, slipping below its 20/50/100/200 EMA cluster around ₹ 426. Despite the short-term volatility, volumes indicate strong institutional participation,' Dasani said.
He added that the RSI near 46 signals a neutral zone—not weakness. With strong fundamentals and attractive valuations, this correction offers a strategic accumulation opportunity for long-term investors, with ₹ 390– ₹ 400 may act as a solid base, Dasani said.
ITC share price dipped as much as 4.3% to the day's low of ₹ 415.10 on the BSE today. Around 10.30 am, ITC stock was trading 3.10% down at ₹ 420.45 per share.
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