The share price of ITC, the cigarette-to-hotels conglomerate, witnessed a dip of 4.62% on Thursday, touching Rs 411.85 per share on the BSE. The decline follows the announcement that British American Tobacco (BAT), ITC’s largest shareholder, is actively working on offloading some of its stake in the company.
BAT’s shareholding in ITC decreased from 29.19% in 2022 to 29.02% in 2023, as revealed in a statement by the company. BAT expressed its intention to leverage its substantial shareholding, dating back to the early 1900s, to release and reallocate capital. The move is part of BAT’s strategy to enhance balance sheet flexibility, with a continuous review of its stake in ITC.
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“We have been actively working for some time on completing the regulatory process required to give us the flexibility to monetise some of our shareholding,” BAT stated in a release. The group aims to explore opportunities to enhance its financial position.
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BAT also highlighted the positive performance of ITC in its financial results, with the Group’s share of post-tax results of associates and joint ventures increasing from £442 million to £585 million.
ITC’s post-tax results, in which BAT has a 19.8% share, rose to £616 million from £514 million in 2022. The improved performance is attributed to India’s economic recovery from the COVID-19 pandemic in 2023.
On the other hand, ITC, the fast-moving consumer goods (FMCG) conglomerate, reported a 6% year-on-year increase in its consolidated net profit for the quarter ending December 2023, amounting to ₹5,335 crore.
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The company’s revenue from operations in Q3FY24 showed a 2% YoY increase, reaching ₹19,484 crore. Notably, the cigarettes business revenue rose by 3% YoY, reaching ₹8,295 crore, while the FMCG-others business exhibited robust performance, recording revenues of ₹5,218 crore, marking an 8% YoY growth.
