ITC Shares Fall 3% as BAT Sells Stake Worth ₹13,334 Crore in Block Deal

May 28, 2025 – Shares of ITC Ltd, one of India’s top cigarette-to-FMCG companies, took a hit in early trade today, dropping over 3% on the NSE. The reason? A massive block deal involving British American Tobacco (BAT), ITC’s biggest shareholder.

🔻 Why ITC Shares Are Falling

The stock opened lower and was trading at ₹417.6, down 3.8%, after a large chunk of its equity changed hands. Around 32 crore shares, or 2.56% of the company’s total equity, were exchanged in a block deal worth a whopping ₹13,334 crore.

These shares were sold at ₹417 each, which is roughly 4% lower than the previous day’s closing price — causing concern among investors.

=🧾 What’s Behind the Deal?

Reports suggest that BAT is behind the sale, offloading a part of its stake in ITC. This would be BAT’s second stake reduction, following a similar block deal last year where it sold 3.5% for ₹16,690 crore.

Though BAT hasn’t officially confirmed the sale, it did issue a statement saying it is “evaluating a possible disposal” of a small part of its shareholding in ITC. The final terms are still being considered, but if completed, the proceeds will help BAT reduce its debt and increase its share buyback program.

📉 Market Impact and Strategic Goals

Despite this offloading, BAT will still hold a 23.1% stake in ITC, keeping it among the top stakeholders. The move is seen as part of BAT’s broader plan to raise funds and improve financial flexibility.

BAT’s CEO, Tadeu Marroco, highlighted that ITC remains a strategic part of their global portfolio. “India is a key market with strong growth potential,” he said, adding that the partnership with ITC will continue to bring long-term value.

💡 What Should Investors Know?

• This stake sale doesn’t change ITC’s business fundamentals, but large institutional movements like these can temporarily impact stock prices.

• BAT’s decision to sell is more about its own financial strategy rather than concerns about ITC’s performance.

• ITC remains a strong player in both the cigarette and FMCG segments, with long-term growth prospects.