BAT sells ITC stake for Rs 17,400 crore; over 30 institutional investors pick up shares

MUMBAI - British American Tobacco Plc (BAT) on Wednesday sold a 3.5% stake in ITC Ltd through the open market at Rs 400.25 a share, aggregating to approximately Rs 17,485 crore. The sale was at a slight discount to Tuesdays closing price of Rs 404.25 of ITC shares.BAT sold 43,68,51,457 shares of the cigarette-to-hotels conglomerate to institutional investors through an accelerated bookbuild process.The shareholding of BAT, which makes Dunhill and Lucky Strike cigarettes, came down to 25.5% in ITC from 29% earlier.The big sale by BAT turned out to be a blessing in disguise rather than a nightmare for shareholders of ITC, as the stock shot up nearly 9% intraday. The stock ended 4.5% higher on the BSE at Rs 422.40.This indicates the strong institutional interest in the stock given the upbeat growth outlook.More than 30 institutional investors, including FPIs, mutual funds, insurance companies, and global investment firms have grabbed a pie of ITC.Indias top mutual funds Axis MF, ICICI Prudential MF, HDFC MF, SBI MF, Kotak Mahindra MF, Aditya Birla Sun Life MF, Nippon India MF, DSP MF, UTI MF, Mirae Asset MF, Bandhan MF, Motilal Oswal MF, and Baroda BNP Paribas MF - bought shares of ITC through block deals. ICICI Bank acquired 250,000 shares of ITC for Rs 10 crore.Among FPIs, International Monetary Fund, Peoples Bank of China, Monetary Authority of Singapore, Government of Singapore, Kuwait Investment Authority, Blackstone Group, Aberdeen, HSBC Global Funds, Citigroup Global, among others, acquired stake in ITC.As for BAT, the net proceeds from the block trade was Rs 166.9 billion (approximately 1.5 billion pounds at current exchange rates).As indicated in our announcement, BAT intends to use the net proceeds to buy back BAT shares over a period ending December 2025, starting with \xa3700 million in 2024, BAT said.This will enable the allocation of operating cash flows to fund investment and also deleverage the balance sheet to reach an adjusted net debt-to-EBITDA ratio of 2-2.5x, while also maintaining a progressive dividend and supporting a sustainable share buyback, BAT said.