ITC Share Price Falls To 50-Day Low After BAT Block Deal — Should You Buy, Sell Or Hold?

ITC Ltd.'s share price fell nearly 5% in Wednesday's trade following reports that British American Tobacco, its largest investor, planned to reduce its stake in the Indian conglomerate through block deals. BAT, as of March 31, 2025, held 20.31% of ITC through its local subsidiary, Tobacco Manufacturers (India) Ltd.

BAT is looking to offload 2.3% stake for Rs 11,600 crore on Wednesday, as NDTV Profit had previously reported. The floor price for the block deal is Rs 400 per share, an 8% discount to the current market price. Should the stake sale proceed as indicated, BAT's ownership in ITC could decrease to 18%.

This development could be negative for ITC structurally, as the overhang of a further stake sale by BAT after a few quarters will come back, believes Nuvama Research. "Hence near term, we expect the stock to come back but be range bound between Rs 400-470."

It can go higher after a few quarters on clarity regarding no further sales, they added. Nuvama Research further said that they will continue to monitor developments in the space, and don't rule out further stake sale by BAT after a couple of quarters.

In March 2024, the London-listed nicotine products seller also divested 436.9 million shares, approximately 3.5% of ITC, for Rs 17,491 crore, marking India's third-largest block deal to date.

According to a press release by BAT, the transaction will provide them with increased financial flexibility as it delivers on its commitment to invest in transformation, deleverage and sustainable shareholder returns.

The scrip fell as much as 4.82% to Rs 413 apiece, the lowest since April 9. It pared losses to trade 3.50% lower at Rs 418.70 apiece, as of 09:20 a.m. This compares to a 0.03% advance in the NSE Nifty 50 Index.

It has fallen 13.31% on a year-to-date basis, but only 2.26% in the last 12 months. The relative strength index was at 59.05.

Out of 40 analysts tracking the company, 38 maintain a 'buy' rating, one recommends a 'hold,' and one suggests 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 14.9%.