ITC Block Deal: BAT sells over 2.5% stake worth Rs 13,860 crore, stock falls 4%
Shares of ITC Ltd fell 3.5% to ₹418.70 on Tuesday after British American Tobacco (BAT), the company's largest shareholder, launched a substantial block deal to offload 2.57% stake in the FMCG major. The deal, which was earlier pegged at 2.3%, was upsized to 2.57%, representing 33.25 crore shares valued at ₹13,860 crore at ₹417 apiece.
In a disclosure made to the London Stock Exchange, BAT said its wholly-owned subsidiary Tobacco Manufacturers (India) Limited intends to sell the shares via an accelerated book-building process. The sale is aimed at providing BAT with increased financial flexibility as it progresses on transformation, deleveraging, and enhancing shareholder returns.
'ITC is a valued associate of BAT in an attractive growth market. While this transaction supports delivery on our commitments to BAT shareholders, we continue to view ITC as a core strategic investment,' said Tadeu Marroco, Chief Executive of BAT, in an official statement released on May 27, 2025.
The transaction will support BAT's goal of reaching a 2.5x adjusted net debt/adjusted EBITDA leverage corridor by the end of 2026 and fund a £200 million increase in its share buyback programme. Despite the sale, BAT will retain a significant holding of approximately 23.1% in ITC.
The market reaction was swift, with ITC shares slipping as investors digested the overhang from the large secondary sale. BAT had initially invested in ITC over a century ago and has maintained a beneficial relationship with the Indian conglomerate, which remains one of the country's leading FMCG enterprises.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
Aditya Bhagchandani serves as the Senior Editor and Writer at Business Upturn, where he leads coverage across the Business, Finance, Corporate, and Stock Market segments. With a keen eye for detail and a commitment to journalistic integrity, he not only contributes insightful articles but also oversees editorial direction for the reporting team.
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