ITC Hotels witnessed one of its biggest trading sessions in recent months as a massive 9 percent equity stake, valued at ₹3,856 crore, changed hands through a large block deal. Despite strong buying interest during early market hours, the stock failed to hold its gains and eventually traded flat as profit-taking emerged shortly after the deal.

The transaction involved 18.75 crore shares of ITC Hotels, exchanged at ₹205.65 per share on the block window. The scale of the deal immediately drew attention across market participants, given the size of the stake and the identity of the likely seller.

Major Block Deal Worth ₹3,856 Crore Hits the Market

The block deal saw a massive 18.75 crore shares of ITC Hotels switch ownership. This represented approximately 9% of the company’s total equity. At a price of ₹205.65 per share, the cumulative value of the transaction stood at ₹3,856 crore.

The stock initially reacted positively as the market opened. However, as investors digested the development and early buyers booked quick gains, the share price stabilised and erased most of its early rise. The selling pressure that followed the large offloading of shares added to the muted closing sentiment.

Market watchers noted that such large block deals often result in temporary volatility as institutional buyers and sellers adjust their positions.

British American Tobacco Likely Seller in the Block Deal

British American Tobacco (BAT), one of the largest shareholders in ITC Hotels, is widely believed to be the seller behind the transaction. The Reuters report referenced in the market commentary indicated that BAT had planned to sell a stake worth about USD 776 million in ITC Hotels.

According to the report, this move was part of BAT’s broader strategy to reduce debt and exit non-strategic assets. The company has been actively working on improving its leverage metrics, and offloading its holding in ITC Hotels aligns with that objective.

The stake sale fits into BAT’s ongoing prioritisation of core business operations, while divesting assets that are not seen as crucial to long-term strategy.

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BAT’s Holding Originated from ITC Ltd’s Earlier Demerger

Based on data from LSEG, BAT is the second-largest shareholder in ITC Hotels. Its shareholding in the company originated from ITC Ltd’s earlier decision to spin off its hotel business.

The stake was not directly acquired by BAT but was inherited through its existing investment in ITC Ltd, which transferred the hotels business into the newly listed ITC Hotels entity. This restructuring left BAT with a sizeable stake in the demerged company.

Given that the holding was not acquired through a strategic move, the disposal aligns with BAT’s continued efforts to streamline its portfolio and reduce exposure to non-core assets.

BAT CEO Confirms Stake Not Strategic, Highlights Debt Reduction

BAT’s Chief Executive Officer, Tadeu Marroco, addressed the status of the company’s stake in ITC Hotels. He said the shareholding came to BAT as a result of the demerger executed by ITC Ltd. While acknowledging this ownership, Marroco reiterated that the stake “is not a strategic holding for BAT.”

He added that he is “pleased that the proceeds from this transaction will further support continued progress towards our stated 2026 leverage corridor,” indicating that the sale is part of BAT’s roadmap to improve its balance sheet and meet its debt-reduction goals.

The CEO’s comments confirm the broader intent behind the transaction — using the proceeds to strengthen financial positioning and move toward targeted leverage levels.

Stock Reaction: Early Rise Followed by Profit Booking

In early market action, ITC Hotels shares rose on strong interest following the block deal announcement. A transaction of this scale typically attracts attention from institutional investors and high-net-worth buyers.

However, as the session progressed, profit booking started to weigh on the stock. Traders who anticipated a short-term bounce took the opportunity to exit their positions, causing the share price to trade flat by the end of the session.

Market participants viewed the flat close as a reflection of supply-demand equilibrium after a large stake hit the market. While early enthusiasm was visible, the selling pressure from the sizeable offload overshadowed intraday gains.

Investor Interest Remains Strong Despite Offload

Despite the large sell order, the demand for ITC Hotels shares remained healthy, as evident from the complete absorption of the 9% equity floated in the block deal. The ability of the market to digest a transaction worth nearly ₹4,000 crore indicates robust institutional interest in the counter.

While the identity of the buyers was not disclosed in the source information, such block deals typically see participation from domestic funds, foreign institutions, and long-term investors seeking exposure to established hospitality businesses.

ITC Hotels has been active in expanding its brand presence, although the article does not mention operational or financial metrics.

Conclusion

The ₹3,856 crore block deal in ITC Hotels marked a significant event for the company’s stock, with 18.75 crore shares or 9% equity changing hands at ₹205.65 per share.
British American Tobacco emerged as the likely seller, aligning with its declared strategy to reduce debt and exit non-strategic investments.

Although the stock saw an initial rise, profit booking eventually pulled the shares flat. Still, the strong interest shown by buyers in absorbing the entire block highlights continued confidence in the ITC Hotels story.

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