Shares of ITC Ltd experienced a decline in Thursday’s trade following an announcement by British American Tobacco (BAT) regarding a potential sale of some of its stake in the Indian conglomerate, which spans from cigarettes to hotels. The stock slipped by 4.15% to reach a day low of Rs 414, compared to a previous close of Rs 431.90. BAT, the largest shareholder in ITC, disclosed a reduction in its stake from 29.19% in 2022 to 29.02% in 2023.
BAT expressed its commitment to enhancing balance sheet flexibility, stating, “We continue to pursue all opportunities to enhance balance sheet flexibility and, as part of this, we regularly review our stake in ITC.” The multinational corporation emphasized that its substantial shareholding in ITC presents an opportunity to release and reallocate capital.
Furthermore, BAT highlighted an increase in its share of post-tax results from associates and joint ventures, predominantly attributed to the performance of its main associate, ITC Limited, in India. The foreign firm reported a 19.8% surge in its share of ITC’s post-tax results, reaching £616 million compared to £514 million in 2022.
BAT affirmed ongoing efforts to complete the regulatory process required to facilitate the monetization of its shareholding in ITC, promising updates at the earliest opportunity.
As of 2:20 pm, ITC Ltd shares were trading 4.08% lower at ₹414.20, reflecting investor reaction to the news of BAT’s potential stake sale.
