BAT Trims ITC Holdings—Institutional Investors Get a Taste of India’s FMCG Giant

Unknown Apr 02, 2026 1,500 Views

British American Tobacco (BAT), through its wholly-owned subsidiary Tobacco Manufacturers (India) Limited, has announced its intention to sell approximately 2.3% of the issued ordinary share capital in ITC Limited. The sale will be conducted via an accelerated bookbuild process and is targeted at...

Key Highlights

The transaction should enhance financial flexibility for BAT as it continues to invest in transformation and sustainable returns to shareholders.
BAT intends to utilize the secured funds to reach its target leverage corridor of 2.0- 2.5x adjusted net debt/adjusted EBITDA by the end of 2026.
BAT also plans to utilize approximately £200 million proceeds to expand its share buyback programme to a total of £1.1 billion for 2025

Strategic Implications

BAT has been a long-term shareholder in ITC Limited since the early 1900s, and following the sale, BAT will remain a shareholder with approximately 23.1% stake.
The transaction is not anticipated to impact BAT’s financial guidance for 2025 or 2026, excluding the share buyback programme expansion.
BAT management has confidence in ITC management and its ability to continue to deliver shareholder value.

Financial Position

BAT generated revenue of £25.9 billion in 2024, with an adjusted profit from operations of £11.9 billion.
As part of the turnaround strategy, BAT has goals of reaching 50 million adult consumers of smokeless products by 2030 and generating 50% of revenue from these products by 2035.
BAT was also awarded Triple A in 2024 from CDP for its climate change, water and forests efforts.

Market Reaction

Given the long-term relationship between BAT and ITC, investor interest in this transaction is high.
The sale is part of BAT's overall plan of optimizing its financial position and enhancing shareholder value.

Source: Investing.com

Source: Investing.comBritish American Tobacco (BAT), through its wholly-owned subsidiary Tobacco Manufacturers (India) Limited, has announced its intention to sell approximately 2.3% of the issued ordinary share capital in ITC Limited. The sale will be conducted via an accelerated bookbuild process and is targeted at institutional investors.

Key Highlights

- The transaction should enhance financial flexibility for BAT as it continues to invest in transformation and sustainable returns to shareholders.

- BAT intends to utilize the secured funds to reach its target leverage corridor of 2.0- 2.5x adjusted net debt/adjusted EBITDA by the end of 2026.

- BAT also plans to utilize approximately £200 million proceeds to expand its share buyback programme to a total of £1.1 billion for 2025

Strategic Implications

- BAT has been a long-term shareholder in ITC Limited since the early 1900s, and following the sale, BAT will remain a shareholder with approximately 23.1% stake.

- The transaction is not anticipated to impact BAT’s financial guidance for 2025 or 2026, excluding the share buyback programme expansion.

- BAT management has confidence in ITC management and its ability to continue to deliver shareholder value.

Financial Position

- BAT generated revenue of £25.9 billion in 2024, with an adjusted profit from operations of £11.9 billion.

- As part of the turnaround strategy, BAT has goals of reaching 50 million adult consumers of smokeless products by 2030 and generating 50% of revenue from these products by 2035.

- BAT was also awarded Triple A in 2024 from CDP for its climate change, water and forests efforts.

Market Reaction

- Given the long-term relationship between BAT and ITC, investor interest in this transaction is high.

- The sale is part of BAT's overall plan of optimizing its financial position and enhancing shareholder value.

Source: Investing.com

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