British American Tobacco (BAT) sold a 9 per cent stake in ITC Hotels through block deals in the open market on Friday, garnering ₹3,820 crore (£315 million) in the process.

HCL Capital Private Ltd, an NBFC backed by the Shiv Nadar family, emerged as the largest buyer of BAT’s stake. It is likely to hold close to a 7 per cent stake in ITC Hotels, according to information on NSE.

Other major buyers of ITC Hotels shares were Morgan Stanley, Nippon India Mutual Fund, Vanguard Group, Societe Generale and Abu Dhabi Investment Authority.

Following the completion of the process, the London-based tobacco major will be left with a 6.3 per cent stake in India’s second largest hospitality chain.

BAT said the proceeds of the sale will be used to reduce the debt of the company. The maker of Dunhill cigarettes had £29.75 billion ($39.5 billion) of adjusted net debt on the books as of June 30.

The stake sale will allow the company to progress to within the target 2 to 2.5x adjusted net debt/adjusted EBITDA leverage corridor (adjusted for Canada) by the end of 2026, BAT said in a statement.

ITC Hotels stock closed at ₹205.65 a share, down by ₹2.07 apiece on the NSE.

On Thursday, BAT had announced its intention to sell anywhere between 7-15.3 per cent stake in ITC Hotels, depending on the market response. The tobacco major had earlier guided that it has no plans to stay invested in a non-core (hospitality) business.

BAT became a major non-promoter public shareholder 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 held a 15.3 per cent shareholding in ITC Hotels.

Established in 1975, the business of ITC Hotels has grown to over 140 hotels across 90-plus destinations in the Indian subcontinent and has plans to reach 220 hotels by 2030. Following the demerger, ITC Hotels has been trading as a publicly listed entity since January 2025.

While this is the first tranche of stake sale by BAT in ITC Hotels, it has cut its stake in ITC Ltd twice.

The foreign major holds 22.94 per cent stake in ITC Ltd now.

Tadeu Marroco, chief executive of BAT, had said on Thursday: “I am pleased
that the proceeds from this transaction will further support continued progress towards our stated 2026 leverage corridor.”