ITC shares surged by nearly 9% on Wednesday, contributing Rs 32,127.11 crore to its market capitalization, driven by news of a potential stake sale. The stock rose by 8.59% to reach Rs 439 on the BSE and by 8.29% to Rs 438 on the NSE. This significant increase propelled the company’s market capitalization to Rs 5,36,453.59 crore during morning trading, making it the top gainer among both BSE Sensex and NSE Nifty firms.
British multinational BAT PLC announced its intention to sell up to a 3.5% stake in India’s ITC Ltd through a block trade to institutional investors. The plan involves selling around 43.68 crore ordinary shares of ITC by its subsidiary Tobacco Manufacturers (India) Ltd (TMI). At Tuesday’s closing price of Rs 404.25 per share, the total value of the ITC shares slated for sale amounts to approximately Rs 17,659.72 crore. Even after the transaction, BAT will maintain a significant 25.5% stake in ITC, reflecting their longstanding relationship.
The proceeds from the stake sale will be utilized by BAT to repurchase its own shares until December 2025, starting with a planned buyback of £700 million in 2024. Additionally, the company aims to allocate its operating cash flow towards investments for transformation and further deleveraging. This move underscores the enduring partnership between BAT and ITC, dating back to the early 1900s, and highlights their commitment to mutual growth and development.
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