Wed May 28 04:20:00 UTC 2025: **Summary:**

ITC Ltd. shares plummeted nearly 5% following reports of British American Tobacco (BAT), its largest investor, planning to sell a 2.3% stake through block deals at a discounted price of Rs 400 per share. This move, aimed at increasing BAT’s financial flexibility, has sparked concerns about potential future stake sales, leading to a negative outlook from analysts like Nuvama Research, who predict range-bound trading for the stock. This follows a previous sale by BAT in March 2024 and raises questions about their long-term commitment to ITC.

**News Article:**

**ITC Shares Plunge as Major Investor BAT Plans Further Stake Reduction**

**Mumbai, India** – Shares of ITC Ltd. experienced a sharp decline in Wednesday trading, falling nearly 5% after reports emerged that British American Tobacco (BAT), the company’s largest investor, intends to reduce its stake. BAT, which held 20.31% of ITC as of March 31, 2024, is reportedly looking to offload a 2.3% stake through block deals, aiming to raise Rs 11,600 crore.

The block deal, priced at Rs 400 per share, represents an 8% discount to the current market price, according to sources. If the sale proceeds as planned, BAT’s ownership in ITC would decrease to approximately 18%.

This move follows a previous divestment by BAT in March 2024, where the London-listed tobacco giant sold 3.5% of ITC for Rs 17,491 crore. BAT stated the transaction would “provide increased financial flexibility” for the company.

Analysts are viewing the development with caution. Nuvama Research believes the sale creates an “overhang” of potential future stake sales, potentially limiting the stock’s upward movement in the near term. They forecast a range-bound trading pattern between Rs 400 and Rs 470, suggesting that the stock might only recover after more clarity emerges regarding BAT’s long-term intentions.

Despite the current volatility, a majority of analysts remain optimistic about ITC’s long-term prospects. Bloomberg data indicates that 38 out of 40 analysts tracking the company maintain a ‘buy’ rating, with an average 12-month consensus price target suggesting a potential upside of 14.9%.

As of mid-morning trading, ITC shares were trading down 3.50% at Rs 418.70 apiece. Investors are closely monitoring the situation for further developments regarding BAT’s future plans and their impact on ITC’s share price.

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