ITC's Stock Surges Amid Block Deal Rumors with British American Tobacco

Early on Wednesday, the price of ITC's stock shot up by more than 8% due to speculation about a significant block deal involving British American Tobacco Plc (BAT) potentially selling its ITC shares. The stock price reached ₹439.00 per share on the BSE, showing a big jump.

Reports suggest that a large chunk of ITC shares, equivalent to 3.5% of the company's total ownership, were traded in a block deal before regular trading began. These shares were sold at an average price of ₹400.4 each, making the total transaction worth ₹17,491 crore.

Earlier, BAT had announced its plans to sell a 3.5% stake in ITC Ltd, a company known for its involvement in various sectors including cigarettes and hotels. This move is expected to reduce BAT's share in ITC to 25.5%.

Tadeu Marroco, BAT's CEO, stated that the proceeds from the sale could help fund a planned buyback of shares and reduce the company's debt.

Despite recent declines in ITC's stock price, some analysts see this as a good opportunity to buy because the company's valuation looks attractive. Manish Chowdhury, a researcher at StoxBox, believes in ITC's potential for long-term growth due to its strong brand and its expansion into the FMCG sector.

CLSA, a brokerage firm, has upgraded its rating on ITC stock to 'Buy,' with a target price of ₹486 per share, saying that the current market volatility presents a good opportunity. According to technical analysis by Vaishali Parekh from Prabhudas Lilladher, ITC's stock looks promising with a target price of ₹465.

At 9:20 am, ITC shares were trading at ₹429.10 apiece on the BSE, showing investors' confidence in the wake of the block deal rumors and positive analyst outlooks.