Shares of this large-cap company fell around 3 percent in Tuesday’s trading session after the largest ITC shareholder prepares to sell their stake this week. The stock has given a low return of 4 percent in one year compared to its 5-year average return.
With a market capitalization of Rs. 5,01,131 crores, the shares of ITC Ltd started Tuesday’s trading session on a lower note at Rs. 406.50 compared to its previous close of Rs. 409.40. During the trading session the shares hit a low of Rs. 399.35, making a loss around 3 percent and are currently trading at Rs. 402 apiece.
According to reports, the London-headquartered, British American Tobacco (BAT) is preparing to offload a portion of its stake this week. Furthermore, BAT has tapped Wall Street majors such as Bank of America and Citigroup to divest shares worth around 2.5 billion dollars via the block deal.
As per the latest shareholding pattern, British American Tobacco currently holds a 29 percent stake in ITC and is the largest shareholder in the FMCG company. Moreover, BAT has been a shareholder in ITC in some or the other way since the early 1900s and has been subject to numerous share capital changes and regulatory restrictions.
Furthermore, these deals are often conducted at a discount to the current market price. According to Bloomberg, details of the transaction could still change, and the stake sale may happen next week depending on market conditions.
Coming onto the company’s financial statement, the revenue increased marginally by 1.3 percent from Rs. 17,774 crores during the September quarter to Rs. 18,019 crores in the December quarter. In addition, the net profits increased by 8 percent from Rs. 4,965 crores to Rs. 5,407 crores during the same period.
In FY24, ITC plans to allocate 35 to 40 percent of its capital expenditure (capex) towards building a large, future-ready non-cigarette FMCG business and the conglomerate’s total capex across segments averages over Rs. 3000 crores annually, with a significant portion directed towards the non-cigarette FMCG business.
Headquartered in Kolkata, ITC was incorporated in 1910. The company is the largest cigarette manufacturer and seller in the country and operates in five business segments at present FMCG Cigarettes, FMCG Others, Hotels, Paperboards, Paper and Packaging, and Agri-Business.
Written By Vaibhav Patil
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