Street signs: ITC's drag, Indiabulls high rollers, Paytm Money urgency

ITC’s drag: BAT sparks 6% plummet

Shares of ITC declined by nearly 6 per cent last week after British American Tobacco (BAT), holding a 29.03 per cent stake, announced its intention to sell a portion of its stake in the cigarette major. Analysts suggest that the impending supply of shares could exert downward pressure on ITC’s stock. Additionally, the foreign direct investment cap in ITC means that BAT cannot directly sell to another foreign entity. Instead, it will sell in the open market via private placements to local investors or foreign portfolio investors. Analysts note that even if BAT reduces its holdings, ITC’s weighting in global indices won’t increase due to foreign ownership limits. Brian Freitas, an insight provider at Periscope Analytics, warns that the increase in ITC’s free float could put pressure on the stock. He observes, “This will be an overhang on the stock, with existing investors looking to sell ahead of the placement with a view to buying back the stock at the placement.”

Indiabulls high rollers: HNIs grab mortgage opportunity

Indiabulls Housing Finance appears to be attracting the attention of high networth individuals and boutique investment firms. Singularity AMC, Plutus Wealth Management, ACM Global Laboratories, and Mahima Stocks, among others, were observed purchasing the mortgage lender’s rights entitlement from existing investors like Life Insurance Corporation of India, Vanguard, and PIMCO at an average price of Rs 41 per rights entitlement. Indiabulls’ Rs 3,693 crore rights issue, priced at Rs 150 per share, concludes on Tuesday. Subscribers, however, will initially pay Rs 50, with the remaining Rs 100 to be announced by the company at a later date. Partly paid shares of Indiabulls issued in the rights issue will be traded separately, with fully paid shares closing at Rs 185 in the last session.

Paytm Money urgency: Deadline for bank swap looms

Paytm Money, a platform facilitating the buying and selling of shares and mutual funds, is urging clients with Paytm Payments Bank (PPBL) as their default bank account to switch to another bank. Last week, Paytm Money issued a step-by-step guide on its website to assist clients in making the switch before February 29, after which PPBL clients will no longer be able to make fresh deposits. While bank-backed brokers typically acquire a major portion of their clients from their parent bank, sources indicate that less than 10 per cent of the investment platform’s clients have PPBL as their default bank. Paytm Money is wholly owned by One97 Communications, which holds a 49 per cent stake in PPBL.