BAT on Thursday said it was looking to sell between 7 per cent and its entire 15.3 per cent stake in the hospitality major, stating that the final number of shares sold would be determined to optimise the overall pricing outcome to the group | Photo Credit: TOBY MELVILLE
British American Tobacco has completed the block trade of 18.75 crore ordinary shares in ITC Hotels to investors by way of an accelerated bookbuild process, BAT said in a release.
“Net proceeds from the block trade amount to ₹38.2 billion (approximately £315 million at current exchange rates). As indicated in our announcement made on December 4, 2025, 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,” said the UK-based cigarette major.
At the end of the second quarter of this financial year, the maker of Lucky Strike and Dunhill cigarettes held a 15.3 per cent stake in ITC Hotels.
According to NSE data, around ₹3,855.94 crore worth ITC Hotels shares changed hands in block deals on Friday. During the block deals, 18.75 crore company shares were traded at ₹205.65 apiece, which was at around 1 per cent discount over its previous day’s close of ₹207.72 per share.
BAT’s wholly-owned subsidiaries — Tobacco Manufacturers (India), Myddleton Investment Company and Rothmans International Enterprises– sold the shares, which were bought by HCL Capital Private Ltd and Nippon India Mutual Fund.
On Friday, ITC Hotels’ scrip ended the day at ₹205.65 apiece on NSE, down 1 per cent from the previous close.
Pricing optimisation
Notably, BAT on Thursday said it was looking to sell between 7 per cent and its entire 15.3 per cent stake in the hospitality major, stating that the final number of shares sold would be determined to optimise the overall pricing outcome to the group.
“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 Chief Executive Tadeu Marroco said in a release on Thursday.
The Hotels business of diversified conglomerate ITC Ltd was demerged into ITC Hotels Ltd with effect from January 1, 2025. The equity shares of the company were listed on the NSE and BSE on January 29.
ITC has a stake of about 40 per cent in the new entity and the balance 60 per cent is held directly by its shareholders proportionate to their shareholding in the conglomerate.
British American Tobacco in February this year said it would be divesting its stake in ITC Hotels at the “best moment” as it has no interest in becoming the long-term shareholder of a hotel chain in India.
“BAT has no interest to become a long-term shareholder of a hotel chain in India, and as a consequence, at the right moment we will decide what is the best moment to maximise shareholder value. We will be divesting and we will be using proceeds to making sure that we get to the leverage corridor of 2.5 and 2 by 2026,” Marroco had told analysts after declaring the group’s preliminary results for the year ended December 31, 2024.
The cigarette major is the largest shareholder of ITC Ltd with 22.91 per cent stake. BAT had sold 3.5 per cent stake in ITC Ltd in March last year through block trades to institutional investors for ₹16,690 crore (£1.5 billion).
ITC Hotels currently has a portfolio of over 200 hotels – with 146 operational and 61 in the pipeline. The hospitality chain has six brands: ITC Hotels, Mementos, Welcomhotel, Storii, Fortune and WelcomHeritage.
Published on December 5, 2025
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