ITC share price up by 4.45%?

What is BAT?

It is abbreviated as British American Tobacco(BAT).

Under what name BAT invested in ITC?

BAT PLC (“BAT” or the “Group”) announces that, subject to customary closing conditions, its wholly-owned subsidiary Tobacco Manufacturers (India) Limited plans to sell institutional investors up to 436,851,457 ordinary shares in ITC Limited through an accelerated bookbuild process .

Why do BAT sold there shares ?

In a desirable market with room for long-term expansion, where BAT gains exposure to the most populous market on earth, ITC is a valued colleague of BAT. Since their first investment in ITC in the early 1900s, BAT and ITC have enjoyed a long-standing, mutually beneficial partnership.

ITC, one of the top FMCG companies in India, has produced substantial returns for its investors, and BAT is still totally in favor of the management group, operations, and business plan of ITC.

With a position of around 25.5% in ITC, BAT will continue to be a major shareholder of the company once the proposed Block Trade is completed.

BAT plans to repurchase BAT shares with the net proceeds of the Block Trade, beginning with £700 million in 2024 and finishing in December 2025. We intend to allocate our operating cash flow towards financing our transformation and achieving additional deleverage.

The following will be the main components of BAT’s capital allocation going forward:

• ongoing financial support for our change
• increasing dividends
• Continue cutting back to a new range of 2-2.5 times adjusted EBITDA compared to adjusted net debt.
• Repurchases of shares that are sustainable

“I am confident that ITC, under the leadership of its current management, will continue to create value for its shareholders,” stated Tadeu Marroco, CEO of BAT. We anticipate continuing to be a significant shareholder in ITC as it expands. With this deal, BAT is able to kickstart a long-term buyback more quickly and enable us to keep using leverage in the direction of a new goal range of 2-2.5 x adjusted net debt/adjusted EBITDA.