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Stock block deals at 14-year high: ITC, TCS, IndiGo stake sales boost

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Block trades

in India are close to capping their best quarter in 14 years as the country’s booming

stock market

encourages

shareholders

to monetise stakes.
Shareholders have raised $7.1 billion selling their holdings in India so far this year, with the quarter on track to have raised the most from block trades since the Jan-March period in 2010, data compiled by Bloomberg show.

India’s equity capital markets have been running hot for the past year as its stocks climb to record highs and foreign investors pile in amid a rotation away from China.
“With elections over, there could be another round of block trades or sell-downs. Domestic liquidity and foreign appetite remain very strong for Indian assets,” said Rahul Saraf, Citigroup’s India head of investment banking.

With one of the world’s fastest rates of economic growth and relative political stability, Indian equities have soared, with the sensex notching eight years of annual gains. The euphoria has prompted companies in India to go public at the fastest pace on record, as well as encouraging a continuous flow of additional share sales by listed firms since the start of the year.

Screenshot 2024-03-22 051501

The flurry of activity contrasts with a slowdown in other parts of Asia, including Hong Kong and China, where a mix of economic growth woes and lower valuations have kept sellers on the sidelines. There hasn’t been a block larger than $500 million in mainland China or Hong Kong since July, Bloomberg-compiled data show.

This week, Tata Sons raised the equivalent of $1.1 billion through the sale of shares in the group’s software services unit TCS. It’s the largest block involving shares of the software services unit since 2018, data compiled by Bloomberg show.
British American Tobacco last week raised almost $2 billion from the sale of a 3.5% stake in its ITC for Asia’s largest block trade of 2024. That followed an upsized $820-million stake sale in IndiGo by its co-founder, who cashed in as the stock neared a record high.
US home appliance giant Whirlpool sold part of its stake in its Indian unit in Feb, raising $469 million. It joined a number of foreign firms monetising their Indian businesses to take advantage of the high valuations.
Investors have mostly welcomed the stake sales. ITC’s shares surged the most in almost four years after BAT’s disposal and were trading above the offer price last week. Bloomberg

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