ITC varies its investments in other firms

Cigarette-to-hotels major ITC may have kept its investment in EIH Ltd intact, but it has been varying those made in other companies.

Between April and October, ITC reduced its holding by about three per cent in cigarette player VST Industries, according to stock exchange information. The average price of the VST stock during the period was Rs 573.52. At present, ITC holds about 7.2 per cent stake in VST Industries.

In Agro Tech Foods, once promoted by ITC, the company had offloaded close to three per cent till July, over a nine-month period. In hotel stocks, however, ITC has either increased or held on to its stake. It increased its stake in Hotel Leelaventure by 2.26 per cent in the March-June quarter through Russell Credit, its investment arm, taking its holding to 10.74 per cent.

In EIH Ltd, which owns and operates the Oberoi chain of hotels, ITC’s stake remains unchanged at 14.98 per cent, according to the latest shareholding pattern filed with the stock exchanges. This is just short of the 15 per cent level that would make an open offer mandatory.

EIH recently announced that its board had given approval to raise up to Rs 1,300 crore through a rights issue. If ITC does not subscribe to the issue, then its holding in EIH would be diluted. Deveshwar had said recently that the board would decide once the open offer came.

ITC has been accumulating EIH shares since 2000, when the stock was at Rs 35 a share. On the last trading day, the EIH stock closed at Rs 140.15 on the Bombay Stock Exchange.

Late August, in a surprise move, Reliance Industries Ltd picked up a 14.2 per cent stake in EIH in a deal with the promoters for Rs 1,021 crore, valuing the company at Rs 7,200 crore. RIL Investments & Holdings Pvt Ltd raised its stake subsequently to 14.8 per cent in EIH.