**British American Tobacco Sells $1.5 Billion Stake in ITC Ltd**
British American Tobacco (BAT) has successfully divested a stake worth $1.5 billion (approximately ₹12,926 crore) in ITC Ltd through a block deal on Wednesday, exceeding its initial plans. Initially, BAT aimed to sell a 2.3% stake by offloading 290 million shares, valued at around $1.36 billion. However, the final transaction involved 313 million shares, representing about 2.5% of ITC’s total equity, with shares priced at ₹413 each—reflecting a 4.8% discount compared to ITC’s closing price of ₹433.90 on the National Stock Exchange (NSE) the previous day.
The board of ITC had declared a dividend of ₹7.85 per share, with the stock going ex-dividend on Wednesday. Following the block deal, ITC shares saw a decline of 1.26%, trading at ₹419.75 on the NSE. Since the start of the year, the stock has experienced a drop of approximately 10.3%. The transaction was managed by Goldman Sachs India and Citigroup Global Markets India, though BAT, Goldman, Citigroup, and ITC did not respond to requests for comments.
In a statement, BAT indicated that the proceeds from the sale would enhance its financial flexibility as it works towards its deleveraging goals and transformation strategy. Post-sale, BAT will remain the largest shareholder in ITC, holding a 23.1% stake. The company stated that the funds would help it achieve a target adjusted net debt/adjusted EBITDA leverage ratio of 2-2.5x by the end of 2026 and support an increase in its share buyback program to a total of £1.1 billion by 2025.
BAT’s CEO, Tadeu Marroco, emphasized the importance of ITC as a strategic asset in their global operations, highlighting ongoing business opportunities in India. Earlier this month, ITC reported a remarkable net profit of ₹19,561.57 crore for the March quarter (Q4 FY25), a staggering 247% increase from ₹5,638 crore in the same period last year, largely due to a one-time exceptional gain from the demerger and listing of its hotels business. Excluding this gain, ITC’s adjusted net profit was ₹4,398.51 crore, reflecting a decline from the previous year, while revenue from operations rose to ₹20,376 crore, a 10% year-on-year increase.
**FAQ**
**What was the reason behind BAT’s stake sale in ITC?**
BAT’s stake sale aimed to enhance financial flexibility and support its deleveraging targets while maintaining its position as ITC’s largest shareholder.
