Why ITC share price rose over 8% today, biggest single-day gain since Sept 2021

ITC share price today: ITC share price rose over 8% today (March 13) after it was reported that a block deal in which British American Tobacco Plc (BAT) was likely to be the seller of ITC shares. On the BSE, ITC shares rallied as much as 8.59% to ₹439.00.

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What we know about the block deal?

In the block deal that took place in the pre-market block window, around 43.7 crore ITC shares changed hands. These amounted to 3.5% of the total equity of the company and were sold at an average price of ₹400.4 apiece, taking the total transaction value to ₹17,491 crore, it was reported.

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What British American Tobacco has said on block deals?

British American Tobacco said that it would sell a 3.5% stake in ITC Ltd, in block deals. British American Tobacco holds over 29% of the cigarettes-to-hotels conglomerate had said that it will sell the shares at ₹384–400.25 each, a 4–5% discount to ITC’s Tuesday closing price of ₹401.90 on the NSE.

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The lock-in period for the deal is 180 days and after the sale British American Tobacco's shareholding in ITC is at 25.5%.

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Is there more to come?

British American Tobacco had earlier told investors that its shareholding would not fall below 25% as chief executive Tadeu Marroco said, “With this transaction, BAT can accelerate the start of a sustainable buyback, while enabling us to continue to deleverage towards a new target range of 2–2.5X adjusted net debt/adjusted EBITDA."