One of the country’s most valued and cash-rich consumer goods and services company ITC Ltd has been cutting its holding in companies who are in the same business as the Kolkata-based firm, in which it had picked stakes over a period of time. The tricky and debatable issue is whether this is just a treasury operation or part of a bigger gameplan.

Although the quantum of money involved in the stake sale is much too small to indicate any fund raising move by ITC, it fuels speculation of a strategic decision and begs the question whether it may follow it up by distancing itself from hospitality firm EIH, a company that was seen as a hostile takeover bid.

ITC sold stakes in cigarette maker VST Industries and food products company Agro Tech Foods where it had let ConAgra pick a large stake and run the show years ago, over the last couple of months.

It sold around 2% stake in VST Industries, a company in which it held till recently as much as 14% stake. VST Industries is promoted by British American Tobacco (BAT), which also happens to be the single largest shareholder of ITC and yet is not counted as promoter of ITC that has over time diversified beyond its cigarette business to a wide range of FMCG segments. It may be recalled ITC was locked in a battle with BAT for the control of VST around a decade ago.

ITC has also sold around 6% stake in Agro Tech that operates strong consumer brands such as Sundrop and Act II. This shows ITC is on an exit mode from the company. As of September end it held around 11% in the company (formerly ITC Agro Tech) in which ConAgra is now at the helm of affairs.

To be fair, it is not yet clear if ITC is indeed exiting competitor firms. In fact, it has hiked its holding early this year in luxury hotel chain Hotel Leela Venture. If the grapevine is to be believed, ITC is still interested in a majority stake in EIH and it may yet come up with an open offer. However it is waiting for Oberoi group chief PRS Oberoi to hang his boots completely.

Although corporate watchers considered an entry by Reliance Industries in EIH Ltd as a strong deterrent for ITC chief YC Deveshwar not to make any hostile move, there are others who believe both Reliance Industries and former suitor Analjit Singh will exit EIH Ltd as and when ITC offers a lucrative deal.

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