BAT to sell up to 15.3% stake in ITC Hotels via block trade process

BAT plans to divest up to 15.3% stake in ITC Hotels, calling the holding non-strategic; proceeds from the block trade will support its target leverage corridor by 2026

British American Tobacco plc (BAT) said on Thursday it plans to sell between 7 per cent and 15.3 per cent of its stake in ITC Hotels.

 

In a regulatory filing, BAT said that its wholly owned subsidiaries — Tobacco Manufacturers (India), Myddleton Investment Company, and Rothmans International Enterprises — intend to sell between 7 per cent and 15.3 per cent of the issued ordinary share capital in ITC Hotels to investors through an accelerated bookbuild (block trade), subject to customary closing conditions.

 

The final number of shares to be sold will be decided to optimise pricing outcomes for the group, the company said.

 

According to reports, BAT is likely to offload 7 per cent stake. The deal price is ₹205.65 per share, and the block size ₹2,998 crore, reports said. Shares of ITC Hotels closed at ₹207.75 on Thursday on the BSE.

 

The proceeds will support BAT’s progress towards achieving its target leverage corridor of 2–2.5x adjusted net debt/adjusted earnings before interest, tax, depreciation, and amortisation (adjusted for Canada) by the end of 2026.

 

In a statement, BAT Chief Executive Tadeu Marroco said: “Our direct shareholding in ITC Hotels was a result of the demerger process completed by ITC earlier this year. As previously stated, a direct stake in ITC Hotels is not a strategic holding for BAT. I am pleased that the proceeds from this transaction will further support progress towards our stated 2026 leverage corridor.”

 

At an after-results analyst meet in February, Marroco had said BAT would divest its stake in ITC Hotels “at the right moment”.

 

He had also said BAT had no interest in being a long-term shareholder in a hotel chain in India. “As a consequence, at the right moment, when we decide the best time to maximise shareholder value, we will be divesting.”

 

As part of its efforts to pare debt, BAT sold a 2.5 per cent stake in ITC in May 2025. The sale fetched net proceeds of ₹12,941 crore.

 

ITC Hotels has been trading as a publicly listed entity since January 2025, following its demerger from ITC.

 

Following the demerger, BAT holds a 15.3 per cent stake in ITC Hotels, while ITC holds 39.85 per cent.

 

ITC Hotels — one of ITC’s early diversifications — has grown to over 140 hotels across more than 90 destinations in the Indian subcontinent.