ITC Ltd, the Indian conglomerate with businesses ranging from cigarettes to hotels, witnessed a significant transaction involving its equity shares amidst reports that British American Tobacco (BAT), its largest public shareholder, is preparing to offload a portion of its stake in the company, according to a report by NDTV Profit.

According to a Bloomberg report, around 12 million equity shares, representing a 0.09 per cent stake, changed hands in a large trade on March 11. The identities of the buyers and sellers remain undisclosed.

Separately, Bloomberg reported that BAT is exploring the possibility of selling a portion of its ITC shares this week, citing individuals familiar with the matter. The London-based tobacco giant, which currently holds a 29.03% stake in ITC through three of its entities, has been in discussions with Bank of America Corp and Citigroup Inc. regarding a potential divestment of ITC stock worth approximately $2 billion to $3 billion through block trades.

Last month, BAT hinted at its intentions to monetise its stake in ITC to enhance its balance sheet flexibility. Tadeu Marroco, BAT’s Chief Executive, stated, “We continue to pursue all opportunities to enhance balance sheet flexibility and, as part of this, we regularly review our stake in ITC. We recognise that we have a significant shareholding, which offers us the opportunity to release and reallocate some capital.”

Marroco further added, “We have been actively working for some time on completing the regulatory process required to give us the flexibility to monetise some of our shareholdings, and we will update you at the earliest opportunity,” as quoted by Bloomberg.

Shares of ITC closed 0.96% lower at 409.4 apiece on the Bombay Stock Exchange, while the benchmark BSE Sensex declined by 0.83%.

The potential divestment by BAT, ITC’s long-standing strategic partner, could have significant implications for the Indian company’s future strategy and shareholder structure.

(With Inputs from Bloomberg)

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Published: 12 Mar 2024, 09:24 AM IST

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