British American Tobacco Plc. in a bid to maintain its influence on ITC Ltd.'s board and its growth plan has no intention to trim holding below 25.51%, according to chief executive Tadeu Marroco.
"We are very happy with the shareholding (in ITC), and we want to keep a level of influence on the board. That's why, when we trimmed some of the shareholding, we decided to keep it above 25%,” Marroco said at the UBS Global Consumer and Retail Conference.
"We have used the proceeds for buybacks (of BAT shares) just as a reflection in terms of the company's evaluation of market value," he said. "It's no-brainer that we start to retain these shares that have a very high dividend yield."
The hotel-to-cigarette conglomerate's largest shareholder sold a 3.5% stake for Rs 17,484 crore through an open market transaction earlier this week. BAT had said that they have a significant shareholding in ITC, and it offers an opportunity to reallocate some capital. It had then said it would use the net proceeds of the sale to buyback BAT shares over a period ending December 2025, starting with £700 million in 2024.
ITC has a "very generous" dividend payout policy, Marroco said. The company is transforming itself and is making a number of investments, and BAT wants to "have a say" in those decisions.
Moreover, the Indian economy is growing, and ITC has a "massive positive prospect" in a country with great demographics. "So BAT is very satisfied to be a relevant shareholder."
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