ITC's market capitalisation catching up with British American Tobacco

ITC: Marquee Investors, Government of Singapore, and ICICI Prudential Mutual Fund bought 9,15,45,678 equity shares and 59,26,138 equity shares in the FMCG company, respectively, via open market transactions. They bought shares at an average price of Rs 400.25 per share, valued at Rs 3,901.3 crore. Foreign investor British American Tobacco, through its subsidiary Tobacco Manufacturers (India), sold 43,68,51,457 equity shares in the company at the same price, valued at Rs 17,484.98 crore.

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26 Aug, 2025 12:21

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Indian tobacco major ITC Ltd, in which British American Tobacco (BAT) sold about Rs 17,000 crore worth of stake this morning, is now within touching distance of its single largest stakeholder in terms of market capitalisation.

As of March 13, ITC Ltd market capitalisation at $64 billion is just short of British American Tobacco’s $68 billion. Notably, while the BAT stock has fallen 21 percent in the last one year, ITC share price has risen about 11 percent.

At close, ITC stock was at Rs 422, gaining over 4 percent, following reports of BAT's 3.5 percent stake sale.

Also read: Brokerages turn bullish on ITC as valuations turn attractive; see 22% upside

BAT, which is ITC's largest shareholder, sold 43.7 crore shares of the conglomerate at Rs 400 per share, for a total of Rs 17,491-crore in a block deal on March 13. With the stake sale, BAT has trimmed its holding in ITC to 25.5 percent.

As of December 2023, BAT owned around 29 percent stake in ITC. BAT became invested initially in the stock during the 1900s. London-based British American Tobacco (BAT) makes and sells cigarettes, tobacco and other nicotine products.

In a note, BAT said that the firm intends to use the net proceeds of the sale to buy back BAT shares over a period ending December 2025, “starting with GBP 700m in 2024”. “We will continue to allocate operating cash flow to fund investment in our transformation and to further deleverage,” the note added.

Also read: ITC stays on Goldman Sachs ‘buy’ list with hope of revival in cigarette volumes

Brokerages continue to remain bullish on the stock. Morgan Stanley analysts expect its outperformance to resume after stake sale. Additionally, the brokerage adds that they remain bullish due to expectations of a moderate cigarette tax environment, continued scale-up of non-cigarette businesses and reasonable valuations.

Fisdom’s Nirav Karkera believes that an increase in free float will cause an upward adjustment in the weights on the index. “For instance, the weight on the NIFTY50 can be expected to increase by ~23 bps,” he explains. While supply overhang seems largely out of the way he believes that demand dynamics are expected to work in favour of the price.

In Q3, ITC reported a 6.5 percent YoY increase in its consolidated net profit, to Rs 5400.51 crore for the quarter ending in December. Total revenue from operations of the company rose 2 percent YoY to Rs 17,651.85 crore for the same period.

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