ITC share price falls 4% on likely ₹14,000 crore stake sale by BAT via block deals

ITC block deal: Shares of ITC Limited declined 4% in early trade on Wednesday, May 28, following multiple block deals in the counter, wherein British American Tobacco (BAT) likely offloaded a 2.6% stake in the diversified conglomerate, worth nearly ₹14,000 crore.

According to media reports, 33.25 crore shares, representing a 2.57% stake in ITC, changed hands via six block deals at ₹417 apiece, amounting to approximately ₹13,900 crore. However, the official details of the parties involved in the block deal will likely be known post-market trading hours today.

This block deal size was higher than the 2.3% stake BAT said it intended to sell. Despite the stake sale, BAT will remain ITC's largest investor post-disposal, with a 23.1% stake.

A Reuters report on Tuesday said BAT is selling up to 290 million shares in the deal, at a floor price of ₹400, a discount of 7.8% to ITC stock's closing price.

The London-based cigarette maker had offloaded 436.9 million shares, or roughly 3.5% of ITC's outstanding shares, for about $2 billion last year, in what was India's third-largest block deal ever, as per Reuters.

ITC stock turns ex-dividend

Apart from the block deal, ITC stock hogged the limelight as it turned ex-date and ex-record for its final dividend of ₹7.85 apiece.

The company, earlier this month, along with its Q4 results, had announced a dividend, for which it had fixed May 28 as the record date.

The record date helps determine the entitlement of the members for a corporate action undertaken by the company.

To be eligible for the dividend, ITC shareholders should have purchased the stock a day prior, as the Indian stock market follows a T+1 settlement system.

Should you buy ITC stock after block deal?

According to Harshal Dasani, research analyst at INVasset PMS, the ITC block deal has opened a long-term accumulation window.

“ITC witnessed a ₹13,863 crore block deal as BAT sold a 2.57% stake at ₹417, triggering a temporary price dip. The stock closed at ₹402.20, slipping below its 20/50/100/200 EMA cluster around ₹426. Despite the short-term volatility, volumes indicate strong institutional participation,” Dasani said.

He added that the RSI near 46 signals a neutral zone—not weakness. With strong fundamentals and attractive valuations, this correction offers a strategic accumulation opportunity for long-term investors, with ₹390– ₹400 may act as a solid base, Dasani said.

ITC share price dipped as much as 4.3% to the day's low of ₹415.10 on the BSE today. Around 10.30 am, ITC stock was trading 3.10% down at ₹420.45 per share.

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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