 "ITC limited")
The government has decided not to disinvest its 7.87 per cent equity in FMCG giant ITC Limited for the next few years, according to a report by The Financial Express (FE). The value of this holding has more than doubled in less than two years and risen by nearly a quarter in the past eleven months.
The Centre is getting around Rs 1,000 crore dividend annually from the cigarette-to-FMCG conglomerate for its 7.87 per cent stake. The Centre holds a stake in ITC through the Specified Undertaking of the Unit Trust of India (SUUTI). ITC's recent financial results and the demerger of its hotel business have boosted the performance of its stock
An official was quoted as saying that the Centre is holding ITC strategically and will make its exit from ITC in small tranches at a certain stage in the long run. He added that the exit will not take place immediately as the stock is doing well because of the demerger.
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In recent years, the Centre has sold most of its shares held through SUUTI in L&T and Axis Bank. It had sold a 2 per cent stake from SUUTI's holding in ITC to garner about Rs 6,700 crore in February 2017. After that, it has not cut its stake significantly in the company.
The board of ITC had okayed the demerger of its hotel business on August 14, with plans of listing the new entity in about 15 months. Stakeholders have been demanding that ITC should demerge business segments as its tobacco business places limits on investments from large investors because of ESG (Environmental, Social, and Governance) concerns.
For the September quarter (Q2FY24), ITC has reported a lower-than-expected rise in consolidated net profit. ITC's Q2 consolidated profit was up 6 per cent year-on-year (YoY) at Rs 4,898.07 crore
