ITC Shares Tumble 3 Percent as Massive Rs 9,437-Crore Block Deal Triggers Heavy Selling

Shares of FMCG and cigarette major ITC Ltd came under severe selling pressure on Thursday, dropping as much as 3% in intraday trade to emerge as the top drag on the benchmark Nifty 50. The slump followed a massive block transaction executed during the morning session in which approximately 36 crore equity shares—representing nearly 2.9% of the company's equity base—changed hands.

The block deal was completed at an average price of Rs 257.35 per share, valuing the total transaction at around Rs 9,437 crore. On the BSE, the stock touched an intraday low of Rs 260.35, dragging the broader FMCG pack lower even as the headline indices traded with moderate losses.

Details of the Mega Block Deal

The high-volume exchange occurred during the morning trading window, prompting heavy churn across domestic brokerage terminals:

• Deal Size: Approximately 36 crore equity shares, or ~2.9% of ITC's outstanding equity capital.
• Execution Price: Transacted at Rs 257.35 per share, representing a discount to Wednesday's closing price.
• Total Transaction Value: Estimated at Rs 9,437 crore.
• Trading Impact: Overwhelming institutional churn made ITC the most actively traded counter on both the NSE and BSE by turnover.

While counterparties involved in Thursday's block trade were not immediately identified in the morning exchange alerts, market participants suspect institutional repositioning by foreign portfolio investors.

The GQG Partners Stake Reduction

The block transaction closely follows mandatory disclosures made under Regulation 29(2) of the Securities and Exchange Board of India (SEBI) Substantial Acquisition of Shares and Takeovers Regulations. The filings revealed that Rajiv Jain-led boutique investment firm GQG Partners LLC had systematically trimmed its exposure to ITC.

According to the regulatory filings, entities managed by GQG Partners offloaded 3,96,85,790 shares in open-market transactions, bringing the collective holding of the fund and its persons acting in concert down from 3.48% to 3.17%. The majority of this stake cut was executed by the Goldman Sachs GQG Partners International Opportunities Fund, which reduced its stake from 1.95% to 1.69%. The crossing of the cumulative 2% disclosure threshold prompted the regulatory filing, setting off cautious sentiment across institutional desks.

Operating Pressures and Tax Adjustments

Beyond institutional exits, ITC has been navigating a shifting operating landscape for its core cigarettes division. Following the transition of tobacco products to a higher tax structure under revised GST and excise slabs, the company implemented several rounds of price increases across key cigarette brands, including Classic Connect and Gold Flake Super Star.

While price revisions have sought to protect gross margins, brokerages have raised concerns regarding potential elasticity effects on cigarette sales volumes in semi-urban and rural markets. With large institutional holders recalibrating their portfolios and near-term market supply expanding, traders remain watchful of support levels around the block trade's execution benchmark.

Tags: ITC GQG Partners Nifty 50 BSE NSE SEBI