Shares of fast-moving consumer goods conglomerate ITC recovered around 2% on Friday to touch Rs 259.60, clawing back some ground following a steep retreat in the preceding trading session. The initial drop had pushed the equity down by more than 4% on Wednesday to a 52-week trough of Rs 253.15, triggered by a massive institutional divestment conducted through a secondary market transaction.
The steep decline occurred when an emerging markets fund associated with Rajiv Jain-backed GQG offloaded almost 37 crore shares of the company at a price of Rs 257.35 each in a block deal worth approximately Rs 9,395 crore. Before this transaction, regulatory records from June 2026 recorded GQG holding an ownership position of 3.12%, which equated to 38.99 crore shares in the enterprise. Several institutional participants, including Fidelity, ICICI Prudential Mutual Fund, and SBI Mutual Fund, alongside other domestic and international entities, absorbed the equity on offer.
The substantial block transaction took place after a protracted period of share price pressure, during which the stock plummeted 30% across 2026 and lost 36% over a twelve-month horizon. Broader historical trends reflect negative returns exceeding 41% across a three-year period, balanced against a cumulative advance of over 12% over a five-year span.
Company operations and equity performance faced notable friction earlier in the year when authorities implemented additional excise duties on tobacco products. The duty hike prompted a sector-wide equity retreat, which was partially stabilized after management instituted price increases. Broader macro headwinds, including surging petroleum prices driven by supply interruptions and general inflationary conditions, contributed further downward momentum across the industry and wider financial markets.
To mitigate the fiscal burden of the excise revision, the company chose a gradual, multi-stage structure for raising cigarette prices rather than enacting a single uniform increase, with an exception made for the KSFT category. Industry channel assessments conducted by market observers indicate that the bulk of these planned tariff revisions have now been fully rolled out into retail distribution networks.
Market participants are now focusing their attention on the upcoming release of the second-quarter financial statements to evaluate the business impact. Institutional brokerages present diverging interpretations of the near-term path: Nomura designated the company as its preferred choice within consumer staples with a buy assessment, whereas JM Financial anticipates muted quarterly numbers. HDFC Securities retained an add stance with a price target of Rs 300, attributing per-share valuations of Rs 137 to the tobacco division and Rs 98 to the non-cigarette consumer goods enterprise.
Key numbers
- GQG block deal value: Rs 9,395 crore
- Block deal execution price: Rs 257.35 per share
- GQG stake as of June 2026: 3.12%
- ITC 52-week low: Rs 253.15 per share
- HDFC Securities target price: Rs 300 per share
What a board might note
- How effectively does the company's phased pricing strategy, noted by HDFC Securities, protect margins without sacrificing consumer demand following excise duty increases?
- Given the Rs 9,395 crore block sale by GQG and the absorption by institutional buyers like SBI Mutual Fund and Fidelity, what are the implications for institutional shareholder concentration and stock volatility?
- How might the divergent performance across segments—such as the Rs 137 per share valuation for cigarettes versus Rs 98 for other FMCG lines—affect capital allocation strategies ahead of Q2 earnings?
Source: Economic Times Markets, 9 October 2026. This is a summary of a news report, published as general information. It is not legal, tax or investment advice.
This article is journalism and commentary. It is not a recommendation to buy or sell any security, and it is not professional advice. Read the full disclaimer.
