ITC shares faced another setback on Tuesday, extending losses for the second consecutive day with a decline of 2.5% trading at day lows of Rs 399.35 . Today’s drop further compounds the situation, as the stock has now receded by 20% from its peak of Rs 499.7, reached on July 24 last year.
Media reports suggest that British American Tobacco (BAT), ITC’s largest shareholder holding a 29% stake as of the December quarter, is gearing up to initiate its share sale, potentially as early as this week. BAT’s move to monetize a portion of its stake follows a strategic consideration to release and reallocate capital.
In an official release, BAT acknowledged their significant shareholding in ITC and highlighted the opportunity presented by the share sale. The release stated, “We have been actively working for some time on completing the regulatory process required to give us the flexibility to monetize some of our shareholding and will update you at the earliest opportunity.”
BAT’s association with ITC dates back to the early 1900s, and throughout this enduring partnership, it has navigated numerous share capital changes and regulatory restrictions.
A note from brokerage firm Goldman Sachs on February 29 emphasized weak near-term earnings and identified the anticipated BAT stake sale as a key factor behind the correction in ITC’s stock price.
The report projected a potential recovery in cigarette volumes in the March quarter, but cautioned that the paper business might pose a near-term earnings drag, with a potential recovery expected only in the September quarter of the financial year 2025.
As of the latest update, ITC shares are currently trading 1.8% lower at Rs 401.95. The stock is trading below all key moving averages and has witnessed a 14% decline since the beginning of this year. Investors and market observers closely monitor these developments, recognizing the potential impact of BAT’s share sale on the future trajectory of ITC.
ITC share performance in last one year
In terms of stock performance, ITC shares have demonstrated mixed returns across multiple time frames. Over the past month, the stock has given sliped over 1%. The last six months have seen even more pressure as the stock shed over 11%, indicating a heavy selling.
Year-to-date, ITC shares have dropped by 13.85%, reinforcing the stock’s negative momentum in the current fiscal year. Looking at the broader picture, the stock has delivered an return of over 5.15% in the last twelve months.