Calcutta: British American Tobacco (BAT), the maker of Lucky Strike and Pall Mall, will sell its stake in ITC Hotels in the market, raising anywhere between ₹3,000 crore and ₹6,600 crore, depending on market response.
In a regulatory filing to the London Stock Exchange, the company said its wholly owned subsidiaries, Tobacco Manufacturers (India) Limited, Myddleton Investment Company Limited and Rothmans International Enterprises Limited, intend to sell between 7 per cent and 15.3 per cent stake in ITC Hotels via block deals.
Going by the market capitalisation of ITC Hotels of ₹43,279 crore on the NSE on Thursday, monetisation of the entire stake would fetch the London-based tobacco major about ₹6,600 crore.
“The final number of shares sold will be determined to optimise the overall pricing outcome to the Group,” BAT informed the bourses. If it pauses the sale at 7 per cent, BAT would rake in about ₹3,000 crore.
BAT became a major non-promoter public shareholder in India’s second largest hospitality chain after the demerger of the hotel business from ITC Ltd, where it is the largest shareholding block. As a result of its shareholding in ITC at the time of the demerger, BAT holds a 15.3 per cent shareholding in ITC Hotels.
Established in 1975, the business of ITC Hotels has grown to over 140 properties across 90-plus destinations in the Indian subcontinent. Following the demerger, ITC Hotels has been trading as a publicly-listed entity since January 2025.
Commenting on the development, Tadeu Marroco, chief executive of BAT, said: “Our direct shareholding in ITC Hotels was a result of the demerger process that was completed by ITC earlier this year. As previously stated, a direct stake in ITC Hotels is not a strategic holding for BAT, therefore, I am pleased that the proceeds from this transaction will further support continued progress towards our stated 2026 leverage corridor.”
BAT informed that the proceeds will be used to progress to within the target 2-2.5x adjusted net debt/adjusted EBITDA leverage corridor (adjusted for Canada) by the end of 2026.
ITC Ltd holds a 39.85 per cent stake in ITC Hotels. The Calcutta-based conglomerate had earlier guided that it would not increase stake in the hotel company further. ITC Hotels’ stock closed ₹207.8 a share on the bourses, down nearly 20 per cent from its peak of ₹261 reached in July. BAT has been waiting for regulatory approvals before going ahead with the stake sale.
While it would be a first for BAT to dilute/offload stake in ITC Hotels, the tobacco major has already pared its stake in ITC Ltd twice in two years.
In May, BAT had sold 2.5 per cent in ITC, raising ₹12,941 crore. In March 2024, BAT had sold 3.5 per cent to initiate its buyback programme. The foreign major holds 22.94 per cent stake in ITC Ltd now.