India Said to Sell $993 Million ITC Stake to State-Owned LIC

  • Sale to government-run insurer helps with divestment target
  • Company stake said to be sold for about 275.85 rupees a share

India sold a stake in ITC Ltd., Asia’s second-biggest listed tobacco company, to government-owned Life Insurance Corp. of India for about 66.9 billion rupees ($993 million) as it seeks to meet the year’s divestment target, people with knowledge of the matter said.

The government’s Specified Undertaking of the Unit Trust of India sold ITC shares at about 275.85 rupees apiece, according to the people, who asked not to be identified because the information is private. The price represents about a 0.3 percent discount to Monday’s close. Neeraj Gupta, India’s Secretary of the Department of Investment and Public Asset Management, said by phone that the government sold about 2 percent of ITC through a block trade. 

India raised about 67 billion rupees from the sale, which was priced around Monday’s close, Gupta said. He didn’t identify the buyer or the exact price per share. 

Before the sale, Prime Minister Narendra Modi’s administration was still more than 100 billion rupees away from meeting this year’s divestment target of 455 billion rupees. The government had already lowered the projection from an earlier goal of 565 billion rupees.

“The federal government is sending a strong signal to the market that it is serious about disinvestment targets for the year,” Arun Kejriwal, founder of advisory firm Kejriwal Research & Investment Services Pvt, said by phone Tuesday.

Citigroup Inc., Morgan Stanley and ICICI Securities Ltd. advised the government on the share sale, the people said. D.S. Malik, a spokesman for the India Finance Ministry, and a representative for LIC declined to comment. ET Now reported earlier Tuesday that LIC bought the ITC stake, citing unidentified people.

— With assistance by P R Sanjai, and Santanu Chakraborty

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