ITC

Adds premarket trading detail in paragraph 20, detail on IQOS units in 22.

By Aditya Kalra and Emma Rumney

NEW DELHI/LONDON, Feb 11 (Reuters) - India has ruled out relaxation of a ban on e-cigarettes that would have allowed heat-not-burn tobacco products, dealing a blow to a lengthy private lobbying campaign by Philip Morris International for New Delhi to permit such devices.

India banned e-cigarettes, including heated tobacco products, in 2019. With more than 100 billion cigarettes sold annually, it is the seventh-largest cigarette market by volume, where tobacco kills more than a million people a year.

The world's most valuable tobacco firm, Philip Morris PM.N had hoped India could be a key market for its heated tobacco device, IQOS, which the company says is less harmful to health than smoking.

"The government of India is not considering revoking, amending or relaxing this ban," the health ministry said in response to Reuters queries about the lobbying by Philip Morris.

"India remains committed to evidence-based tobacco control and cessation measures," it said in a statement, adding that the law on e-cigarettes explicitly prohibits heat-not-burn devices, and that situation will stay.

A Reuters review of confidential company letters from 2021 to 2025 shows the Marlboro-maker privately lobbied top Indian officials and a parliamentary panel to consider the science behind devices like IQOS, research it and exempt heat-not-burn products from the ban.

Philip Morris executives also met many state government officials in Davos in January to discuss how the company can create long-term value in the tobacco sector, using products such as IQOS, photographs on LinkedIn show.

A spokesperson for Philip Morris did not comment on the ministry's statement, but said it "regularly engages with governments around the world, including at major international forums such as Davos, to discuss how smoke-free products can greatly advance public health."

Reuters is the first to report India's decision and details of Philip Morris' lobbying.

In an interview with Reuters on Friday, Jacek Olczak, the firm's chief executive, said he had engaged with various people in India, adding that it was "illogical" for the market to be closed to smoking alternatives such as heated tobacco and vapes, but not cigarettes.

It is not clear if any other company is lobbying India against the ban on e-cigarettes. Philip Morris says it has a share of 76% of the global market for heated tobacco products.

IQOS BOOM

Philip Morris had a 7.6% share of India's cigarette market in 2024, up from just 1.75% in 2019, Euromonitor estimates.

Its rival, British American Tobacco BATS.L, owns a stake in India's ITC ITC.NS, which dominates the market.

Andrei Andon-Ionita, analyst at Jefferies, said an IQOS launch in India would have given PMI a way to capture a far bigger slice of the market, offering the "next leg of the growth story" for the product as other key markets mature.

Launched in 2014, IQOS has more than 35 million users worldwide and is Philip Morris' flagship smoking alternative, which it says has been a hit in countries like Japan.

Some regulators, such as the U.S. FDA have concluded that IQOS can benefit public health if smokers use it instead of cigarettes, but the World Health Organization has warned of risks posed by heated tobacco.

India's 2019 ban shut the door on many products from companies such as vape maker Juul and Philip Morris.

Olczak said India's decision to ban smoking alternatives ignores science and data showing that smoking rates decline when alternatives are available, however.

Shares were broadly steady in premarket trading on Wednesday.

LOBBYING PRIVATELY

About 151 billion IQOS heated tobacco units were sold last year in 79 markets.

Philip Morris ran a four-year-long campaign to push Indian officials and a parliamentary panel on health to allow heated tobacco devices, letters show.

In one 2023 letter, Ankur Modi, then its chief strategy officer, asked India to think about tackling smoking-related harm via alternatives, "similar to harm reduction policy for HIV/AIDS", which involves measures such as condom promotion.

The letters also proposed bringing Philip Morris scientists and experts, such as former US FDA officials, to present data and global experience to show how such devices "improve lives".

"PMI is deeply committed to, and invested in the future of lndia," the company said in a November letter to the health secretary, calling for a review of scientific data on heated tobacco products by the Indian Council of Medical Research.

In a statement, state-run ICMR told Reuters it was "not considering or undertaking any research on heated tobacco products".

(Reporting by Aditya Kalra and Emma Rumney; Editing by Clarence Fernandez)

((Email: [email protected]; X: @adityakalra;))

** Shares of ITC ITC.NS rise 4.9% to 325.45 rupees

** Nearly 13 mln shares in ITC traded across 22 block deals on NSE, with 21 deals at premium of 0.6% to 5.4%, LSEG data shows

** Effective Feb 1, India imposed an excise duty on cigarettes in range of 2,050-8,500 rupees ($22.8-$94.5) per thousand sticks based on length of products

** Other Indian cigarette makers Godfrey Phillips India GDFR.NS and VST Industries VSTI.NS up 10.2% and 4.7%, respectively

** In January, ITC, Godfrey Phillips India, and VST Industries dropped 20.1%, 26.3% and 8.9%, respectively

(Reporting by Vijay Malkar)

(([email protected];))

Feb 5 (Reuters) - Indian paper and packaging board maker JK Paper JKPA.NS posted a 58% drop in quarterly profit on Thursday, weighed down by intensifying competition and a one-off charge linked to the country's new labour codes.

JK Paper, which serves clients across sectors including consumer packaged goods and fast food, said consolidated profit after tax came in at 274 million rupees ($3.03 million) for the third quarter ended December 31.

India's paper and packaging sector, which includes firms such as ITC ITC.NS and JK Paper, has also been under pressure for several quarters due to a surge in low-priced imports, forcing local companies to take price cuts at the expense of margins.

The industry has urged the government to curb low-priced imports of paperboards as well as coated and uncoated paper.

JK Paper also booked a one-off charge of 143.6 million rupees linked to the new labour codes, which have shaved millions off corporate earnings in India for the third quarter.

Revenue from operations rose 8% to 17.63 billion rupees for the third quarter.

The New-Delhi-based company supplies a spate of products including office paper, coated paper, writing and printing paper and packaging boards. It has customers in more than 60 countries, such as the United States and Singapore.

"Some improvement is anticipated in the coming quarter due to improved demand and reduction in input costs," Harsh Pati Singhania, chairman and managing director, said in a statement.

Peers Emami Paper Mills EMAP.NS and West Coast Paper Mills WSTC.NS are yet to report their results.

($1 = 90.3450 Indian rupees)

(Reporting by Urvi Dugar in Bengaluru and Praveen Paramasivam in Chennai; Editing by Ronojoy Mazumdar)

(([email protected]; +91 9558725583;))

** ITC ITC.NS down 20.5% so far in January, set for worst monthly performance since April 2000

** Multiple brokerages downgraded stock citing earnings hit from excise duty on cigarettes effective from Feb 1

** Co reported 10% Q3 profit fall on Thursday, on higher raw material costs, one-time labour code charge

** Dolat Capital downgrades ITC to "reduce" from "accumulate"; cuts PT to 330 rupees from 467 rupees

** Says volume and margins in the cigarette business would remain under pressure

** Stock up 0.6% on the day

** Stock rated "hold" on avg by 34 analysts, median PT at 390 rupees - data compiled by LSEG

($1 = 91.8760 Indian rupees)

(Reporting by Brijesh Patel in Bengaluru)

(([email protected]; Ph no. +91 9590227221;))

** Shares of consumer goods maker ITC ITC.NS dip 0.61% to 319.20 rupees ahead of Q3 results

** At least six brokerages downgraded co's shares earlier in Jan after government's new tax on cigarettes - its biggest segment - was seen hitting earnings growth

** Nirmal Bang Equities ("hold", PT down to 335 rupees from 495 rupees) expects 5% y/y rise in quarterly profit; cigarette excise duty hike expected to weigh on near-term cigarette vols, resulting in lower target multiples compared to the past

** PhillipCapital ("buy", TP at 480 rupees) expects ~8% growth in co's revenue, supported by FMCG business's 7-8% growth, with some impact from GST-linked channel disruption

** Co posted 7.1% rise in Q2 revenue, supported by solid growth in its cigarettes and packed goods businesses

** Stock rated "hold" on avg by 34 analysts, median PT at 410 rupees - data compiled by LSEG

** ITC dropped ~12% in 2025, stock down 20% so far in Jan

($1 = 92.0630 Indian rupees)

(Reporting by Surbhi Misra in Bengaluru)

(([email protected] | X: https://twitter.com/SurbhiMisra_ |;))

Adds details about recent management changes from paragraph 2 onwards

Jan 16 (Reuters) - India's Grasim Industries GRAS.NS on Friday named Sachin Sahay as the new chief executive of its paints business, Birla Opus.

Sahay's appointment comes more than two months after the textiles and chemicals manufacturer announced former CEO Rakshit Hargave's sudden departure, surprising analysts and stoking worries about the company's future growth path in a sector where competition is intensifying rapidly.

Since its launch in February 2024, Birla Opus has invested heavily in paint factories across India as well as offered hefty discounts, gaining ground mainly at the expense of market leader Asian Paints ASPN.NS.

Sahay, who will take charge of India's second-largest paints maker by capacity from February 16, joins from diversified conglomerate ITC ITC.NS, where he last served as executive vice president of sales.

(Reporting by Hritam Mukherjee and Abhirami G in Bengaluru; Editing by Janane Venkatraman)

(([email protected]; X: @MukherjeeHritam;))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Refiles to add hyperlinks.

By Ujjaini Dutta

BENGALURU, Jan 12 (Reuters Breakingviews) - Sometimes smokers are hit with a compelling reason to quit. India imposed fresh taxes on cigarettes last month, knocking as much as 17% off the shares of British American Tobacco BATS.L-backed $47 billion ITC ITC.NS and Godfrey Phillips India GDFR.NS which makes and sells Marlboro cigarettes under license with Philip Morris International PM.N. Foreign ownership limits and a ban on vaping had already dented the appeal of a market with 253 million tobacco users. The latest tax jolt is another nail in the coffin for overseas investment in the country.

Around the world, tobacco majors are shifting their focus to alternative products like e-cigarettes on the expectation that cigarette volumes will continue to decline on health concerns and tougher regulations. India's 2019 ban on e-sticks and heated tobacco products makes such a shift difficult for companies in the world's fifth-largest economy. The new excise duty only worsens the outlook.

Tobacco companies are well used to being slapped with sin taxes when government revenues need patching up. Smokes were already subject to a 40% levy following a rejig of goods and services taxes last year. The latest hike pushes the total tax on cigarettes to about 50%, according to brokerage Motilal Oswal. Analysts responded by revising down ITC's expected cigarette sales 13% lower for the next two full financial years, per S&P Global. Rather than quitting, though, most customers will simply downtrade to illicit smokes available in the black market.

Little wonder that BAT has been paring its stake in ITC, despite its 75% share by units of India's formal cigarette market. It has trimmed its 30% holding down to 23% over the past two years, joining other multinational companies in disposing their highly valued equity interests in the country to raise funds for their global business. Despite the tax hit, ITC trades on a rich 21 times one-year forward earnings, twice BAT's multiple, according to LSEG data. Indian cigarette makers are also less profitable, with ITC's net margin trailing its foreign partner's by four percentage points and Godfrey Phillips' roughly half, per Visible Alpha.

Smoking isn't good for you. India is succeeding in making it undesirable, even for corporations who are addicted to the stuff.

Follow Ujjaini Dutta on LinkedIn and X.

CONTEXT NEWS

India will levy an additional excise duty on cigarettes in the range of 2,050 to 8,500 rupees ($22.8 to $94.5) per 1,000 sticks, depending on length, the finance ministry announced late on December 31. The revised dues will take effect on February 1. The new tax will apply in addition to an existing 40% Goods and Services Tax.

Shares of India’s ITC, the $47 billion conglomerate backed by British American Tobacco, fell as much as 9.7% on January 1, while Godfrey Phillips India, the distributor of Marlboro in the country, dropped 17%.

(Editing by Una Galani and Antony Currie; Production by Aditya Srivastav)

((For previous columns by the author, Reuters customers can click on DUTTA/[email protected]))

** ITC ITC.NS slides 13.4% this week after the Indian government imposed a new tax on cigarettes

** Co's stock logs its worst week since mid-July 2017

** Stock has fallen 13% in the last two sessions since the new tax was announced

** Brokerages turn bearish on ITC shares, see impact to volumes, earnings growth from new tax

** ITC is the biggest loser on blue-chip Nifty 50 .NSEI index that is up 1.1% for the week and hit a new record high on Friday

** While analysts' rating on stock remains "buy" on average, number of "hold" and "sell" ratings hit at least two-year high -data compiled by LSEG

** Stock dropped ~12% in 2025, snapping a four-year winning run

(Reporting by Nandan Mandayam in Bengaluru)

(([email protected]; Mobile: +91 9591011727;))

Jan 1 (Reuters) - Shares of Indian tobacco companies fell on Thursday after the government imposed a new excise duty on cigarettes, making them costlier for an estimated 100 million smokers in the world's most populous country.

ITC ITC.NS, maker of Gold Flake and the market leader, dropped 2%, while Godfrey Phillips India GDFR.NS, the distributor of Marlboro in India, declined 4.1%.

ITC was the biggest loser on the Nifty 50 index .NSEI and also led declines on the FMCG index .NIFTYFMCG, which was trading 0.6% lower.

The finance ministry late on Wednesday notified an excise duty of 2,050–8,500 rupees ($22.82–$94.60) per 1,000 sticks, depending on cigarette length, effective February 1.

($1 = 89.8510 Indian rupees)

(Reporting by Kashish Tandon in Bengaluru; Editing by Rashmi Aich)

(([email protected]; 8800437922;))

NEW DELHI, Dec 31 (Reuters) - India has imposed an excise duty on cigarettes in a range of 2,050-8,500 rupees ($22.8-$94.5) per thousand sticks based on the length of the products, effective February 1, the finance ministry said in an order late on Wednesday.

(Reporting by Nikunj Ohri, Chris Thomas)

(([email protected]; +91 90284 60730; Reuters Messaging: twitter.com/nikunj_ohri))

Rewrites throughout with stake value, background on ITC Hotels and share price

Dec 4 (Reuters) - British American Tobacco BATS.L plans to offload its stake worth about $776 million in India's ITC Hotels ITCT.NS, the company said on Thursday, as it looks to reduce debt and exit a non-strategic asset.

The maker of Lucky Strike and Dunhill cigarettes said it intends to sell between 7% and its entire 15.3% stake in ITC Hotels through an accelerated bookbuild process.

BAT is the second-biggest shareholder in ITC Hotels, according to LSEG data. It inherited the stake through its shareholding in ITC Ltd ITC.NS, which spun off its hotels business in January.

"A direct stake in ITC Hotels is not a strategic holding for BAT," CEO Tadeu Marroco said in a statement.

BAT's shares rose 1.5% after the announcement, while India-listed ITC Hotels ended the session roughly flat.

The final number of shares sold will be determined to optimise the overall pricing outcome to the group, BAT said in a statement.

Its roughly 15% holding is currently valued at about $776 million, according to a Reuters calculation.

In a bid to cut its leverage, BAT has also been steadily reducing its stake in ITC Ltd ITC.NS. In May, it sold $1.5 billion worth of shares in ITC and $2 billion last year, in two of the biggest block deals in the Asian country.

ITC Hotels competes with EIH EIHO.NS, parent of Oberoi, and Indian Hotels IHTL.NS which owns the Taj brand. Its portfolio spans luxury to mid-scale segments across six brands.

(Reporting by Raechel Thankam Job in Bengaluru; Editing by Shailesh Kuber and Bernadette Baum)

(([email protected];))

Corrects dateline

Oct 30 (Reuters) - Indian consumer goods major ITC ITC.NS posted a better-than-expected second-quarter profit on Thursday, helped by higher sales volumes in its core cigarette business.

The maker of 'Sunfeast' biscuits and 'Gold Flake' cigarettes reported a 5.4% rise in standalone profit of 51.80 billion rupees ($589.34 million) for the quarter ended September 30.

Analysts, on average, had expected a profit of 50.71 billion rupees, according to data compiled by LSEG.

($1 = 87.8950 Indian rupees)

(Reporting by Urvi Dugar in Bengaluru)

(([email protected];))

- Source link: (https://tinyurl.com/2zces3b6)

- Note: Reuters has not verified this story and does not vouch for its accuracy

(Bengaluru newsroom)

(([email protected]; +91 80 6749 1310;))

Adds new quotes

Sept 4 (Reuters) - India late on Wednesday announced tax cuts on hundreds of consumer items ranging from soaps to small cars to spur domestic demand, and simplified its complicated goods and services tax structure to two rate slabs from four, with some exceptions for luxury and "sin" goods.

The benchmark BSE Sensex .BSESN and Nifty 50 .NSEI rose 0.8% each in early sessions.

Here is how the industry has reacted so far:

ANISH SHAH, GROUP CEO & MD, MAHINDRA GROUP

"The next-generation GST reforms... mark a defining moment in India's journey towards building a simpler, fairer, and more inclusive tax system.

At Mahindra, we view these reforms as transformative. They simplify compliance, expand affordability, and energise consumption, while enabling industry to invest with greater confidence."

SAURABH AGARWAL, PARTNER & AUTOMOTIVE TAX LEADER, EY INDIA

"The rationalization of GST rates on automotive vehicles and parts is a truly welcome and significant development. By making vehicles more affordable across all segments, this move will not only boost consumer spending but also simplify complex classification disputes that have long burdened the industry."

SAMIR SHAH, EXECUTIVE DIRECTOR & CFO, HDFC ERGO GENERAL INSURANCE COMPANY

"The GST Council decision to exempt individual health insurance from GST is a welcome development. This move aligns perfectly with the broader ambition of the regulator of 'Insurance for All by 2047,' providing a tangible step forward in that direction.

While it is anticipated that there will be lowering of the premiums due to lowering of the taxes, we are yet to understand the extent of this reduction as this will also depend upon availability of the input tax credit, which will become clearer over the coming days.”

NILESH SHAH, MANAGING DIRECTOR, KOTAK MAHINDRA ASSET MANAGEMENT CO

"The GST announcement lowers inflation, increases growth, boosts consumer sentiment, doesn't disturb the path of fiscal consolidation, improves ease of doing business and partially offers adverse effects of tariffs."

SHAILESH CHANDRA, PRESIDENT SOCIETY OF INDIAN AUTOMOBILE MANUFACTURES

"This timely move is set to bring renewed cheer to consumers and inject fresh momentum into the Indian Automotive sector. Making vehicles more affordable, particularly in the entry-level segment; these announcements will significantly benefit

first-time buyers and middle-income families, enabling broader access to personal mobility."

C S VIGNESHWAR, PRESIDENT, FEDERATION OF AUTOMOBILE DEALERS ASSOCIATIONS

"The 56th GST Council meeting marks a watershed moment for India's automobile retail industry. This is a decisive step that will boost affordability, spur demand, and make India's mobility ecosystem stronger and more inclusive.

One area that may needs earliest clarification is about levy and treatment of cess balances currently lying in dealers' books, so that there is no ambiguity during transition."

SANJEEV ASTHANA, CEO, PATANJALI FOODS LIMITED.

"At Patanjali Foods, we are fully committed to passing on these benefits to our consumers. This initiative will not only enhance FMCG penetration across urban and rural India but also act as a catalyst for broader economic revival by lifting consumption and supporting allied sectors.

Our categories such as ghee, soaps, biscuits, noodles, honey, and chyawanprash will benefit from this reduction."

RADHIKA RAO, SENIOR ECONOMIST AT DBS BANK IN SINGAPORE

Lower GST rates will be positive for growth in the second half of the year and FY27, besides improving operational efficiency and expanding the size of the formal economy.

GARIMA KAPOOR, ECONOMIST, INSTITUTIONAL EQUITIES, ELARA SECURITIES, MUMBAI

"We expect GST related demand boost to add 100 to 120 bps to the GDP growth over next 4-6 quarters, thereby nullifying the negative impact of higher tariffs on exports to US. We remain constructive on the uptick in consumption demand in the economy as multiple policy levers turn favourable for the first time in a decade."

SHRIPAL SHAH, MD & CEO, KOTAK SECURITIES

"The GST rate cuts come at the right time which is just ahead of the festive season and against the backdrop of US tariff tiffs. Lower taxes on essentials, FMCG products, autos and cement will leave consumers with more money in hand.

This should directly boost demand, help traders and businesses see higher volumes, and may even favourably impact next quarter's earnings. It also carries the potential to ease inflation. The key will be how quickly companies pass on the benefits to customers."

DEVARSH VAKIL, HEAD OF PRIME RESEARCH AT HDFC SECURITIES

"The GST reforms represent a paradigm shift toward economic rationality, with rate reductions on essentials like dairy, medicines, and food directly benefiting consumers due to their inelastic nature.

Combined with RBI rate cuts, FY26 income tax rebates, and moderating inflation, these reforms create multiple stimuli for consumption and economic growth."

(Reporting by Chandini Monnappa, Bharath Rajeswaran and Manvi Pant in Bengaluru; Editing by Mrigank Dhaniwala and Nivedita Bhattacharjee)

(([email protected]; https://www.linkedin.com/in/chandini-monnappa-8a37b013b/;))

** Jefferies says India's overall tax burden on cigarettes may not change, which would be a relief for ITC ITC.NS

** India's GST Council is set to meet on September 3-4 to decide on tax cuts across several categories

** Cigarettes make up about 40% of revenue of diversified conglomerate ITC

** Brokerage says while overall tax burden on cigarettes may not change for ITC, there is a possibility that the salience/mix of ad valorem or specific cess may change

** Maintains "buy" rating on ITC but expects stock to be rangebound "until there is clarity on the revised tax regulations" - Jefferies

** Keeps PT at 535 rupees, ~32% higher than current price

** Avg rating of 37 analysts is "buy", median PT is 496 rupees, ~22% higher than current price - data compiled by LSEG

** YTD, ITC down ~11%

(Reporting by Anuran Sadhu in Bengaluru)

(([email protected]; +91 8697274436;))

** Indian conglomerate ITC ITC.NS reported a beat first-quarter profit view on Friday, led by higher sales of cigarettes and packaged food, particularly in rural areas

** Shares trading 0.7% higher, top gainer on FMCG index .NIFTYFMCG which is trading flat

CIGARETTE VOLUME STRONG; PROFIT IMPACTED BY COMPETITON

** Citi ("Buy", PT: 500 rupees) says it sees continued stead volume growth in cigarettes business but intensifying competition and high-cost leaf tobacco could keep margins under pressure in near-term

** Jefferies ("Buy", PT: 535 rupees) says while ITC's cigarette volumes rose to a multi-quarter high, margins continued to trend down

** Brokerage adds high-cost lead tobacco inventory, along with weak pricing growth due to stiff competition, remains a concern

** HSBC ("Buy", PT: 510 rupees) says the cigarette business remained steady during Q1, with other segments being muted

** Brokerage pares FY26-28 EPS estimates by 2-3%, factoring in lower margins in ITC's business segments

(Reporting by Kashish Tandon in Bengaluru)

((kashish.tandon[email protected]; Mobile: +91 8800437922))

Corrects to say profit fell, not rose, in paragraph 2

Aug 1 (Reuters) - Indian consumer goods conglomerate ITC ITC.NS reported a slightly better-than-expected first-quarter profit on Friday, buoyed by strong demand in its mainstay cigarettes and consumer goods business.

The company, which also sells instant noodles and other food products, said its standalone quarterly profit fell to 49.12 billion rupees ($561.68 million) for the quarter ended June 30 from 49.18 billion rupees a year earlier.

Analysts, on average, had expected 49.1 billion rupees, according to data compiled by LSEG.

($1 = 87.4520 Indian rupees)

(Reporting by Praveen Paramasivam, Ananta Agarwal and Chandini Monnappa in Bengaluru; Editing by Sonia Cheema)

(([email protected];))

July 2 (Reuters) - A shareholder in India's Nykaa FSNE.NS, Hong Kong-based investor Harindarpal Singh Banga and his family, plan to sell stake worth 12.84 billion rupees ($149.93 million) in the beauty products retailer through a block deal, news portal NDTV Profit reported on Wednesday.

The sale will likely be at a 4% discount to Nykaa's current market price, the report said, citing people aware of the development.

Nykaa's shares closed 2.2% higher at 211.59 rupees. The company did not immediately respond to a Reuters request for comment.

Banga, who invested in Nykaa before it went public, owned 4.97% stake in the company as of March 2025, exchange data showed. He pared some of his stake in August last year, selling 40.9 million shares via a bulk deal.

The Indian market logged $5.5 billion worth of secondary market sales by large shareholders of listed companies last month, according to LSEG data. These include Reliance Industries' RELI.NS stake sale in Asian Paints ASPN.NS and British American Tobacco's $1.5 billion stake sale in ITC ITC.NS.

($1 = 85.6420 Indian rupees)

(Reporting by Manvi Pant; Editing by Janane Venkatraman)

(([email protected]; +918447554364;))

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. Updates to add graphic.

By Shritama Bose

MUMBAI, June 27 (Reuters Breakingviews) - What’s good for Indian tycoons is not always good for India. Dutch paint maker AkzoNobel AKZO.AS is selling a controlling stake in its local unit to the domestic JSW Group. The deal fits into its goal to focus its global portfolio amid a hypercompetitive market – but it also deepens India’s capital outflow woes.

The $12 billion maker of the Dulux paint brand on Friday said it would offload up to a 75% stake in Akzo Nobel India to privately held JSW Paints for $1.1 billion. It will retain full control over its local powder coatings business and research unit. The proceeds from the sale will be used to cut debt and buy back shares of the parent.

The transaction comes at an opportune time for AkzoNobel, which decided last October to concentrate on coatings in key geographies. It eases the company away from a market shaken up by the entry last year of local tycoon KM Birla’s Grasim Industries GRAS.NS, whose discounts to grab market share are hurting the margins of incumbents. It makes financial sense too, valuing Akzo Nobel India at 22 times EBITDA, more than twice the multiple at which the parent’s Amsterdam-listed shares trade.

Inspired by these sorts of punchy valuations, multinationals in India have been paring stakes in local units. British American Tobacco BATS.L sold shares in ITC ITC.NS to raise $1.5 billion last month, and U.S. appliance maker Whirlpool WHR.N plans to slash its stake in its Indian business to 20% from 51%. Less benign reasons underpin other transactions. Germany’s Siemens sold 90% in its loss-making wind turbine division to TPG amidst cutthroat competition. Swiss drugmaker Novartis is looking for a buyer for its Indian operations, which it says are relatively small compared to other geographies.

The slate of assets on offer bodes well for Indian founders looking to grow through acquisitions. But it undermines India’s vaunted position as a haven for global capital. Net foreign direct investment during the eight months to the end of November 2024 dropped to $500 million from $8.5 billion in the same period of 2023, per data from the Reserve Bank of India. Blame it on repatriations by global firms, which stood at $44.5 billion for the 12 months ended March 2024, having risen every year since March 2020.

Strong valuations aren’t exactly bad news. But if they wind up making India look less of a magnet for global capital, they’re not uniformly good news either.

Follow Shritama Bose on Linkedin and X.

CONTEXT NEWS

Dutch paint manufacturer AkzoNobel on June 27 said it had signed an agreement to sell up to a 75% stake in its Indian unit to privately held JSW Paints. The transaction is based on a total enterprise value of approximately 1.4 billion euros ($1.64 billion) and includes AkzoNobel’s liquid paints and coatings business in India.

The Amsterdam-listed company expects the net cash proceeds to be approximately 900 million euros, of which around 500 million euros will be used for deleveraging. AkzoNobel intends to launch a 400 million euro share buyback programme after the deal is closed.

“This divestment is a first step in the strategic portfolio review announced in October 2024, aimed at focusing the company’s capital and capabilities on leading positions in key global coatings markets,” AkzoNobel said.

Akzo Nobel India shares were up 8.2% as of 0852 GMT on June 27. AkzoNobel group shares were up 0.2%.

(Editing by George Hay; Production by Oliver Taslic)

((For previous columns by the author, Reuters customers can click on BOSE/[email protected]))

June 13 (Reuters) - ITC Ltd ITC.NS:

• ITC LTD - BUYS ENTIRE SHARE CAPITAL OF SRESTA NATURAL BIOPRODUCTS

• ITC LTD - ACQUISITION MADE FOR 4 BILLION RUPEES CASH-FREE DEBT-FREE

• ITC LTD - ADDITIONAL CONSIDERATION OF UP TO 725 MILLION RUPEES PAYABLE IN 24 MONTHS

Source text: ID:nNSE7Kzyn6

Further company coverage: ITC.NS

(([email protected];))

Adds details on increased deal size and final price and background

By Scott Murdoch

May 28 (Reuters) - British American Tobacco BATS.L has sold a $1.5 billion stake in Indian consumer goods company ITC ITC.NS at 413 Indian rupees per share, according to a term sheet seen by Reuters.

The company sold 313 million shares in ITC, representing 2.5% of ITC, according to the term sheet. This final amount exceeded its initial plan to sell up to 290 million shares in the deal, valued at approximately $1.4 billion.

The final sale price represented a 4.8% discount to ITC's closing price of 433.90 rupees on Tuesday.

Shares of ITC dropped nearly 3% to 421.70 rupees on Wednesday. The stock was the top loser on both Nifty 50 .NSEI and the FMCG index .NIFTYFMCG.

BAT will remain ITC's largest shareholder after the deal, according to LSEG data.

Goldman Sachs GS.N and Citigroup C.N led the deal, the term sheet showed.

The deal is the second major block trade in India this week after IndiGo INGL.NS co-founder Rakesh Gangwal sold a 5.7% stake in the low-cost carrier worth $1.36 billion.

BAT said it would increase its 2025 1.1 billion pounds ($1.49 billion) share buyback programme by 200 million pounds as a result of the deal, which is not expected to have any other impact on its annual outlook.

The London-listed cigarette maker had last year sold 436.9 million shares, or roughly 3.5% of ITC's outstanding shares, for about $2 billion in what was India's third-largest block deal ever.

The British firm in February forecast 1% growth in its annual revenue, citing tax headwinds in key markets such as Bangladesh and Australia.

($1 = 0.7401 pounds)

(Reporting by Scott Murdoch in Sydney; additional reporting Kashish Tandon, Prerna Bedi and Raechel Thankam Job in Bengaluru; Editing by Leroy Leo, Stephen Coates and Sherry Jacob-Phillips)

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May 27 (Reuters) - British American Tobacco PLC BATS.L:

• BRITISH AMER.TOBACCO - RESPONSE TO RECENT SPECULATION

• BRITISH AMERICAN TOBACCO PLC - BAT EVALUATING POSSIBLE DISPOSAL OF PART OF ITC SHAREHOLDING

• BRITISH AMERICAN TOBACCO PLC - BAT CONSIDERING ON-MARKET TRADE FOR ITC SHAREHOLDING

Source text: ID:nRSa2692Ka

Further company coverage: BATS.L

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** ITC ITC.NS reports higher Q4 profit on cigarettes business growth, rural market strength

** Stock up 1.2% to 431 rupees

** Of 37 analysts covering stock, at least seven cut PTs post results, three downgraded stock and five upgraded, per data compiled by LSEG

PRESSURES HAVE PEAKED, UPWARDS FROM HERE

** JP Morgan ("overweight"; PT 475 rupees): Q4 core profit in line with brokerage's estimate; better-than-expected cigarette sales volume growth

** Goldman Sachs ("buy"): Cigarette sales growth "steady"; margin pressure across cigarettes and FMCG "has peaked"

** BofA Securities ("buy", PT 470 rupees): Expects reversal of inflation trends in FMCG, cyclical downturn in paper segment over next 2-3 months to drive better earnings growth

** Investec ("buy", cuts PT to 493 rupees from 498 rupees): Expects ITC to get back to double digit earnings growth in FY26 with sequential improvement across segments

** Sees lower margins in FMCG, cigarettes, but risk reward is favorable

(Reporting by Hritam Mukherjee in Bengaluru)

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May 22 (Reuters) - Indian consumer goods major ITC ITC.NS reported a rise in fourth-quarter profit on Thursday, benefiting from resilient rural demand.

The maker of "Yippee" instant noodles and "Gold Flake" cigarettes reported a standalone profit before tax and exceptional items of 64.17 billion Indian rupees ($746.48 million) for the quarter ended March 31, compared with 62.88 billion rupees a year earlier.

(Reporting by Ananta Agarwal and Shivani Tanna in Bengaluru; Editing by Shilpi Majumdar)

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May 8 (Reuters) - India's consumer goods sector reported an 11% growth in value in the March quarter, as rural growth outpaced that in urban areas for the fifth straight quarter, market research firm NielsenIQ said on Thursday.

Rural areas - which account for just over a third of overall consumer goods sales - have become a bright spot for an industry that is struggling with higher living costs and slow wage growth in large cities.

"Rural markets continue to drive growth, whereas urban metros continue to see a shift toward E-commerce," Roosevelt Dsouza, head of customer success for consumer goods at NielsenIQ, said.

Although rural consumption growth slowed in the March quarter, with volumes rising 8.4% compared to 9.2% in the previous three months, it still outpaced urban demand, where growth decelerated to 2.6% from 4.2%.

Price increases also contributed to the overall value growth, with the cost of staples such as edible oil rising 5.6% during the quarter, compared with just 0.3% in the same period a year ago.

Low base, rural growth, and easing inflation are helping smaller players, which saw 17.8% growth in value, outpacing the broader FMCG market, the report said.

Indian consumer goods maker Marico MRCO.NS reported fourth-quarter profit above analysts' expectations, boosted by improving rural demand and price increases for its key packaged oil brands—underscoring the strength of non-urban markets.

The company also said it plans to expand its presence in villages across India.

Smaller manufacturers are driving consumption compared to larger players, whose volume growth has halved compared to the December quarter, NielsenIQ said.

Hindustan Unilever HLL.NS and Nestle India NEST.NS reported weaker fourth-quarter profits, with Hindustan Unilever cutting its margin forecast amid high commodity costs and sluggish urban demand.

Going ahead, NielsenIQ said revised tax slabs and a favorable monsoon forecast could further lift consumption in the coming quarters.

(Reporting by Ashish Chandra in Bengaluru; Editing by Sonia Cheema)

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** Shares of Aditya Birla Real Estate AITE.NS rise 2.3% to 2,002 rupees

** ITC ITC.NS signs agreement to acquire co's the pulp and paper business for up to 35 bln rupees ($409.5 mln)

** Brokerage Antique says the sale is positive for co as it will bring fresh capital, simplify structure, and boost high-growth areas

** With steady revenue and no long-term debt, the paper business lacks growth as it undertakes only maintenance capex, brokerage says

** Reiterates 'buy' rating on AITE with a Street-high PT of 3,448 rupees; says it remains positive on co's growth prospects in the medium to long term, stock is its top pick

** Avg rating is a "strong buy" and median PT is 2,992.50 rupees - LSEG

** AITE is down ~22% YTD, while ITC is down about 10%

($1 = 85.4770 Indian rupees)

(Reporting by Yagnoseni Das in Bengaluru)

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March 31 (Reuters) - Indian conglomerate ITC ITC.NS said on Monday it would acquire the pulp and paper business of Aditya Birla Real Estate AITE.NS for up to 35 billion rupees ($409.7 million).

The acquisition will add 480,000 metric tonnes per year of capacity to ITC's paperboards and specialty papers business, the company said.

The deal comes as ITC's paperboards, paper, and packaging segment faces headwinds from low-priced Chinese and Indonesian supplies in global markets, weak domestic demand and an unprecedented surge in wood prices.

"The acquisition will strengthen the market standing of ITC's paperboards and specialty papers business and engender new opportunities in the domestic and international markets," said B Sumant, ITC executive director.

ITC, which already produces over 1 million metric tonnes per year, said the transaction is expected to close in about six months, subject to regulatory approvals including clearance from the Competition Commission of India and the transfer of land leases.

($1 = 85.4380 Indian rupees)

(Reporting by Yagnoseni Das in Bengaluru; Editing by Maju Samuel)

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** Shares of consumer goods maker ITC ITC.NS down 2.52% to 430 rupees

** Co's mainstay cigarette business sees robust Q3 sales but margins contract by 270 bps on leaf tobacco inflation

** Core profit margin in FMCG segment contracts 240 bps on steep raw material inflation, despite volume growth of around 4%

** "The competitive intensity continues to remain high in certain categories such as noodles, snacks, biscuits" - Antique Stock Broking

** Paperboard segment performance impacted by low-priced Chinese supplies

** Stock rated 'buy' on avg by 35 analysts, with median PT at 530 rupees - LSEG

** Session's decline trims ITC's 12 month gain to about 5%

(Reporting by Ananta Agarwal in Bengaluru)

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Feb 6 (Reuters) - ITC Ltd ITC.NS:

• ITC Q3 PROFIT 56.38 BILLION RUPEES; IBES PROFIT EST. 51.9 BILLION RUPEES

• ITC Q3 REVENUE FROM OPERATIONS 182.90 BILLION RUPEES

• ITC - DIVIDEND 6.50 RUPEES PER SHARE

Source text: [ID:]

Further company coverage: ITC.NS

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** Shares of ITC Hotels ITCT.NS down 2.7% in debut trade at 175 rupees vs discovered price of 180 rupees determined in pre-open session

** Consumer goods giant ITC ITC.NS spun off its hotel to focus more on its core cigarettes and food business

** ITC was down 0.4% at 433.75 rupees

** In special trading session earlier this month, ITC's price was adjusted lower to 455.6 rupees to account for spin off

** ITC shareholders got one ITC Hotels share for every 10 ITC shares held

(Reporting by Manvi Pant in Bengaluru)

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