ITC Hotels Share Price Drop 3% Following BAT’s Divestment Plans

ITC Hotels share price fell over 3% in intra-day trading on Friday, February 14, after British American Tobacco Plc (BAT), the second-largest shareholder of ITC Hotels, announced plans to reduce its stake in the company by next year.

BAT’s Statement on Divestment Tadeu Marroco, CEO of BAT, mentioned during an earnings call that BAT does not intend to remain a long-term shareholder in the Indian hotel chain. The company plans to divest its stake at the right time to maximise shareholder value. The proceeds from this sale will be used to improve BAT’s financial position, targeting a leverage ratio of 2.5 to 2 by 2026.

BAT’s Stake in ITC Hotels As per the latest shareholding pattern, BAT owns a 15.29% stake in the hotel business. In March 2024, BAT sold a 3.5% stake in ITC for ₹17,491 crore, reducing its ownership in the parent company from 29% to around 25.5%. This sale also enabled BAT to start a sustainable share buyback program, with £700 million planned for 2024 and £900 million for 2025.

ITC Hotels Share Price Reaction

Following BAT’s announcement, ITC Hotels share price dropped 3.44%, reaching ₹164.05, close to its 52-week low of ₹160.55. The stock opened at ₹170.10, higher than its previous close of ₹169.90, but quickly fell. ITC Hotels shares had only recently been listed on January 29, with an initial trading price of ₹188 per share.

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