Hello,
The impending block Deal happened yesterday. In this BAT sold 3.5% of its total stake amounting to 17500 crores around price of 400.25 per share. After this transaction BAT will hold around 25.5% stake. I feel BAT’s overall stake reduction is the good news considering their earlier stand on buybacks and business diversification plans.
And surprisingly around 30 parties bought the available shares. the biggest being ICICI Prudential Mutual Fund. As per data compiled from BSE, ICICI Prudential bought Rs 4,963.10 crore worth ITC shares in 16 block deals. It was followed by the Government of Singapore purchased shares worth Rs 3,664.11 crore in one block deal.
For more details you can refer the below articles.
Who are buyers of ITC shares in nearly Rs 17,500 crore block deals? - BusinessToday
In my view we can see a good upswing in share price in a quarter or so nearing the book closure date for Hotel business demerger. And once the business is demerged financial ratios like ROE and ROCE of ITC going to improve further as Hotel business was more capital-intensive business. that will also increase more cashflow and in turn dividends to share holders, as 85% profit is being currently shared as dividend. Even there will be additional interest of buyers for hotel business.
I feel more good days are ahead for ITC and its investors.
Disclaimer: Invested so views can be biased.
Thanks,
Deb
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