British American Tobacco, the largest public shareholder of ITC Ltd., has launched a block trade to offload up to 3.5% stake in the company for over Rs 17,482 crore.
The London-listed BAT plans to sell up to 43.68 crore shares to institutional investors through an accelerated book-build process, it said in a statement on Tuesday.
The maker of Lucky Strike cigarettes is seeking up to $2.1 billion via the block trade and has offered shares at Rs 384 to 400.2 apiece, Bloomberg reported, citing the term sheet.
Currently, BAT, through three of its entities, owns 29.03% of the Indian cigarettes-to-hotels company, according to the data from BSE. Post-block trade, the stake held will come down to 25.5%.
ITC is a valued associate of BAT in an attractive market with long-term growth potential where BAT benefits from exposure to the world's most populous market, BAT said in a statement.
"I am confident that ITC, under the stewardship of its current management, will continue to create further value for its shareholders," Tadeu Marroco, CEO of BAT, said in the statement. "We look forward to remaining important shareholders in ITC as it continues its journey of growth."
With this transaction, BAT can accelerate the start of a sustainable buyback while enabling us to continue to deleverage towards a new target range of 2-2.5 time-adjusted net debt/adjusted Ebitda, Marroco said.
ITC currently has a weight of 3.71% in the Nifty 50 Index. After the completion of the share sale, ITC will see its weight rise in the Nifty Index.
Shares of ITC closed 1.83% lower at Rs 401.9 apiece, compared with a 0.22% advance in the benchmark BSE Sensex.
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