British American Tobacco sells 9% stake in ITC Hotels for ₹3,820 crore

The ITC Hotels stock on Friday closed at ₹206 a share on the BSE, down by 0.84%

British American Tobacco plc (BAT) on Friday sold a 9 per cent stake in ITC Hotels for Rs 3,820 crore, paring its holding in the company to 6.3 per cent.

 

In a regulatory filing the maker of Dunhill and Lucky Strike said it had completed the block trade of 187.5 million ordinary shares in ITC Hotels to investors by way of an accelerated bookbuild process.

 

Stock exchange data shows, it sold the shares at Rs 205.65 apiece. Among the buyers were Vanguard, Abu Dhabi Investment Authority, HCL Capital and Nippon India Mutual Fund. Shares of ITC Hotels last closed at Rs 206, down 0.84 per cent. 

 

ITC’s hotels division was demerged in January. As a result of its shareholding in ITC at the time of the demerger, BAT’s shareholding in ITC Hotels stood at 15.3 per cent.

 

In the statement to the stock exchange, BAT said on Friday that following the completion of the block trade, BAT retains a 6.3 per cent holding in ITC Hotels.

 

BAT’s move to monetise its holding in ITC Hotels is part of an effort to bring down its debt.

 

On Thursday, while informing its plan to sell stake in ITC Hotels, Tadeu Marroco, Chief Executive of BAT said in a statement, the direct shareholding in ITC Hotels was a result of the demerger process that was completed by ITC earlier this year.

 

He added that a direct stake in ITC Hotels was not a strategic holding for BAT. “Therefore, I am pleased that the proceeds from this transaction will further support continued progress towards our stated 2026 leverage corridor."

 

The company is looking to move within the target of 2-2.5x adjusted net debt/adjusted EBITDA leverage corridor (adjusted for Canada) by the end of 2026.

 

BAT also monetised part of its holding in ITC in March 2024 and again in May 2025 to fund its share buyback programme. The move pushed its holding below the 25 per cent threshold, leading to the loss of its veto rights in the cigarettes-to-soaps conglomerate.

 

A 25 per cent holding allows shareholders to influence or oppose resolutions, especially special resolutions that require 75 per cent of the votes cast to be in their favour.

 

Following the partial stake sale in May, BAT’s stake in ITC stood at 22.93 per cent.