Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey on Tuesday denied media reports regarding the government’s plan to offload its indirectly held stakes in the FMCG major ITC, according to a report by Moneycontrol. Pandey told Moneycontrol, “We are currently not selling our stake in ITC. There is nothing on ITC as of now.”
The central government through the Specified Undertaking of the Unit Trust of India (SUUTI) holds a 7.86 per cent stake in ITC. According to the closing price of February 13, these stocks are worth around Rs 36,457.22 crore.
The DIPAM secretary denied reports that the government is looking to sell its ITC stake to help meet its divestment target. Panday said, “News reports about planning stake sale are wrong stories.”
On February 7, Financial Express reported that the Centre has revived a plan to sell part of its indirectly held stake in ITC and the transaction could even be completed in the current financial year. The report mentioned that if the transaction happens before March, the government could easily meet its revised disinvestment target of Rs 50,000 crore for FY23.
FMCG major ITC also has a presence in hotels, software, packaging, paperboards, specialty papers, and agribusiness. According to the report, LIC holds a 15.3 per cent stake in ITC and domestic mutual funds 9.66 per cent as of December.
In 2017, SUUTI sold its 2 per cent stakes in ITC at a price of Rs 6,700 crore, after that no stake sell has taken place.
For FY23, the government’s disinvestment target was revised to Rs 50,000 crore from the Budget Estimate of Rs 65,000 crore. This was due to 2022’s unfavorable market conditions and a sluggish privatisation drive. The Centre plans to raise Rs 51,000 crore from disinvestment in FY24.
The management of ITC in 2022 said that the conglomerate was willing to an organisational reform that would include demerging the hotel sector and listing its subsidiary, ITC Infotech.
In the December quarter, ITC’s net profit climbed by 21 per cent to Rs 5,031 crore. The gross income of the company increased by 2.9 per cent to Rs 17,122 crore.