ITC Shares Tumble 5% After BAT Offloads Equity Worth Rs 13,344-Cr Via Block Deal

Shares of ITC fell close to 5% in early trade on May 28 after a major block deal worth Rs 13,344 crore took place on the counter. Around 33.25 crore shares, making up a 2.57% stake in the company, were traded at an average price of Rs 417 apiece, which was roughly 4% below the previous closing price.

A report from CNBC-TV18 had already suggested that British American Tobacco (BAT) was looking to offload up to a 2.3% stake, with an aim to prop up around Rs 11,500 crore. Citigroup and Goldman Sachs were reportedly acting as joint brokers for the transaction.

This isn’t the first instance of BAT trimming its stake in the Indian FMCG major. In March last year, the tobacco giant sold a 3.5% stake in ITC, earning around $2 billion from the sale by offloading 43.6 crore shares at an average price of Rs 400.40 each.

The London-listed tobacco major, British American Tobacco (BAT), which currently holds a 25.4% stake in ITC, will remain the company's largest shareholder even after the proposed sale, retaining a 23.1% holding post-transaction. BAT also retains board representation in ITC, with two of its nominees serving as directors.

Following the stake sale, BAT announced an increase in its 2025 share buyback programme by £200 million, taking the total to £1.3 billion ($1.67 billion). The company clarified that the transaction will not affect its annual financial guidance.

In an official statement, BAT CEO Tadeu Marroco touted ITC as a valued partner in a high-potential market, underscoring that BAT continues to benefit from its strategic position in India.

Meanwhile, ITC reported a sharp rise in net profit for the March quarter, driven by a one-time gain following the demerger of its hotels business. Net profit soared manifold on year to Rs 19,561.6 crore, compared to Rs 5,020 crore in the same quarter last year, comfortably beating analyst estimates of Rs 4,960 crore. The company’s standalone revenue rose 9.4% year-on-year to Rs 17,248 crore, also exceeding expectations.

On the operational front, ITC’s EBITDA margins narrowed to 34.7% from 37.1% a year earlier, missing the estimated 36.3%.

For the full fiscal year 2025, ITC’s net profit surged 68.9% to Rs 35,052 crore, up from Rs 20,751 crore the previous year. Annual revenue rose 10.4% to Rs 81,612.78 crore.