Government of Singapore, domestic mutual funds and foreign institutional investors came in hordes to lap up 43.86 crore shares offloaded by Tobacco Manufacturers (India) Ltd, a wholly-owned subsidiary of London-headquartered British American Tobacco.
The deals were executed at Rs 400.25 apiece, which was the upper band of the shares offered in the accelerated book build process launched by BAT last evening.
The maker of Dunhill and Kent said in a statement that net proceeds from the share sale amount to Rs 16,690 crore (approximately £1.5 billion at current exchange rates).
Once the overhang of the stake sale was lifted, the ITC stock rallied on the bourses, rising by Rs 17.55 or 4.34 per cent to close at Rs 422 on the NSE, despite the benchmark Nifty 50 index was down 1.51 per cent to 21,997.
Several brokerages have come out with ‘buy’ rating on the stock with the target price in the range of Rs 480. However, those participating in the book build process on Wednesday are already sitting with a handsome gain.
Among the marquee names, which led one of India’s largest secondary share sale, the government of Singapore was the largest buyer, scooping up 9.15 crore shares which translates to a 0.7 per cent stake in the tobacco-to-hotel major.
In addition, Monetary Authority of Singapore also picked up 1.19 crore shares in ITC.
ICICI Prudential Mutual Fund was the biggest buyer among the domestic institutions, picking up 5.19 crore shares, according to data available on the stock exchanges.
The other prominent buyers were BOFA Securities Europe SA, Societe Generale, Citigroup Global Markets Mauritius Pvt Ltd, Morgan Stanley Asia Singapore PTE, Capital Income Builder, Copthall Mauritius Investment Ltd, Ghisallo Master Fund LP, Capital Worlds Growth and Income Fund among others.
BAT will continue to hold a 25.5 per cent stake in the company, enough to maintain veto power on the board, after the 3.5 per cent sale of shares in ITC.
While the foreign major brought down the stake to start a buyback programme for its own shareholders and deleverage the balance sheet, Indian government-owned Specified Undertaking of Unit Trust of India (SUUTI) has no plans at the moment’ to sell its holding.
Department of Investment and Public Asset Management (DIPAM) secretary Tuhin Kanta Pandey told news agency PTI, that, “there is no such plan at the moment.”
SUUTI holds a 7.82 per cent share in ITC, which does not have an identified promoter group. SUUTI last pared a stake in ITC in February 2017, when 2 per cent equity was sold at a price of Rs 291.95 per share via block deal.
In a block deal, two parties make a transaction involving shares worth at least Rs 5 crore.
