British American Tobacco (BAT) Plc is reportedly set to divest a 3.5% stake in ITC Ltd through block deals, targeting institutional investors. The proposed sale is expected to be priced in the range of Rs 384 to Rs 400.25 per share, representing a 5% discount to the prevailing market price at the lower end of the range. While these block deal reports are yet to be independently verified, market experts anticipate that the move could lead to a $105 million inflow into domestic indices.
Abhilash Pagaria of Nuvama Institutional Equities estimates a $65 million inflow, equivalent to 13 million shares, with a potential 0.9-day volume impact. Additionally, for Sensex, Nuvama Alternative projects approximately $38 million worth of inflows, translating to 7.7 million shares, with an anticipated 0.5-day volume impact. It’s worth noting that ITC shares have experienced a 13.48% decline to Rs 404.25 in 2024 so far, with a 5.31% increase in the past year.
However, with global index providers like MSCI and FTSE already utilizing 24% as the float, representing the maximum foreign ownership limit, Nuvama Alternative doesn’t foresee any weight increase in global passive indices due to this divestment. The outcome of these block deals will be closely monitored for their impact on ITC’s market dynamics and foreign investment in the company.
