ITC slips 3% after huge block deal, trades ex-dividend of ₹7.85 per share

ITC share price today: Shares of FMCG giant ITC dipped 3 per cent to ₹413 (adjusted to dividend) on the National Stock Exchange (NSE) on Tuesday’s intra-day trade after a huge block deal executed on the counter. Around 385 million equity shares representing 3 per cent equity of ITC changed hands on the NSE.

 

At 09:57 AM, ITC was quoting 1.2 per cent lower at ₹421.10, as compared to 0.22 per cent decline in the Nifty50. As many as a combined 413.84 million equity shares representing 3.3 per cent of total equity of ITC changed hands on the NSE and BSE.  Follow Stock Market Updates Today LIVE

British American Tobacco (BAT) likely seller

According to reports, British American Tobacco (BAT) is considering further reducing its stake in ITC in a potential on-market sale. BAT currently holds a 20.3 per cent stake in ITC.

 

According to a Business Standard report,  BAT on Tuesday said that its wholly owned subsidiary, Tobacco Manufacturers (India) Limited (TMI), intends to sell nearly 2 per cent of the issued ordinary share capital in ITC Limited to institutional investors by way of an accelerated bookbuild process (block trade).

 

Media reports indicate that BAT is likely to sell 2.3 per cent stake or 290 million equity shares at a price of ₹ 400 per share (~8 per cent discount to last trading price; 6.5 per cent ex-dividend) or ₹ 11,600 crore. 

 

However, BAT in the press release has mentioned that there can be no certainty that any such transaction will proceed, nor can there be any certainty as to the terms of any potential transaction. It had sold 437 million shares (~3.5 per cent stake) last year at $2 billion (~₹17,000 crore or ₹389 per share).  ALSO READ | ₹102-crore order lifts HBL Engineering share price 3%; key details inside

ICICI Securities view on ITC on BAT stake sale

This event is unlikely to have any impact on the business fundamentals of ITC. BAT is looking for various options to reduce its debt on the book. Funds raised through ITC can be utilised for reduction in debt. 

 

ICICI Securities in a note said that the brokerage firm is positive about medium to long term growth prospects of ITC. This along with discounted valuations make it a better pick amongst the large FMCG companies. The brokerage firm maintains its Buy recommendation on the stock.

ITC trades ex-dividend for ₹7.85 per share

The board of ITC on May 22, 2025 has recommended a final dividend of ₹7.85 per share for the financial year ended March 31, 2025. The company has fixed Wednesday, May 28, 2025 as the record date for the purpose of determining entitlement of the members for payment of final dividend.

Company outlook

According to Mirae Asset Sharkhan, cigarette volume growth momentum is expected to sustain with the government not increasing taxes on cigarettes. Market coverage for FMCG products was stepped up to 2x pre-pandemic levels. Direct reach enhancement was around 1.4x over pre-pandemic levels. Strong traction to product launches and increased digital and modern trade salience to ~31 per cent will help the non-cigarette FMCG business’s revenue to consistently grow in mid-teens to high teens in the coming years.   ALSO READ | Hindustan Copper shares surge 4% on strong Q4 profit; Details here

 

ITC has undertaken relevant strategic actions to revive growth in the non-cigarette FMCG business in the near term. After the demerger of the asset-heavy hotels business, ITC’s return profile will substantially improve in the coming years. The stock continues to trade at a discounted valuation of 24x and 22x its FY26E and FY27E EPS, respectively. The brokerage firm maintains a Buy on the stock with an unchanged SOTP-based price target of ₹522.

About ITC

ITC is diversified consumption play with presence in businesses such as cigarettes, FMCG, Agri and Paperboard, Paper & Packaging (PPP) in India. Its strategy hinges towards utilising funds generated from cash cow cigarette business in improving the growth of FMCG and other businesses. The company demerged and separately listed the hotel business, enhancing shareholders value with better growth visibility.