ITC overtakes Infosys to become India's sixth most valuable company

ITC’s share price rose 59 per cent over the past year and 24 per cent so far in 2023, making it the best performer in the Nifty50 index. On the other hand, Infosys shares have fallen by 20 per cent in 2023, wiping off Rs1.80 lakh crore of investors’ fortunes, following a dent in its March quarter earnings.

With steady gains in shares, ITC entered the Rs5 lakh crore market capitalisation club earlier last month.  As of 4 May 2023, ITC was the seventh-largest company by market capitalisation in India.

ITC now looks set to overtake Hindustan Unilever Ltd (HUL) as the country’s largest FMCG company, and the fifth most valuable company. HUL currently commands an m-cap of Rs5.88 lakh crore against ITC’s Rs5.11 lakh crore. Analysts expect ITC shares to continue to rally, as its various businesses are expected to perform better than its peers. 

In fact, 95 per cent of analysts tracking ITC shares have a “buy” recommendation on the stock. “The stock remains strong, and long-term fundamentals are intact. Besides, the strong dividend yield offers support to the stock,” according to brokerage firm CLSA said.

FMCG major ITC Ltd rose by nearly 2 per cent in intraday trade on Friday to touch new 52-week high after it announced acquisition of 39 per cent stake in Sproutlife Foods Private Limited (SFPL), the company which owns Yoga Bar.

The shares of ITC closed 1.02 per cent higher at Rs428.85 on BSE. It touched its new 52-week high of Rs431.90 on Friday. On a year-to-date basis, ITC shares have delivered 29 per cent returns to its investors, while in the last one year it has surged 64 per cent.

Meanwhile, ITC is reported to have acquired 2,443 equity shares of Rs10 each and 7,215 compulsorily convertible preference shares of Rs10 each for a consideration of Rs175 crore in Sproutlife Foods Private Limited (SFPL).

“The company has on 4 May 2023 acquired 2,443 equity shares of Rs10 each and 7,215 compulsorily convertible preference shares of Rs10 each for an aggregate consideration of Rs175 crore," ITC stated in a regulatory filing.

Sproutlife is a direct-to-consumer (D2C) start-up engaged in the manufacture and sale of innovative products catering to health-conscious consumers under the clean label, new-age digital-first brand 'Yoga Bar'," the company said in its exchange filing.

The company plans to acquire 100 per cent of Sproutlife over a period of three to four years.

ITC in January had announced in January plans to acquire D2C health food brand Yoga Bar, a health snack company based in Bengaluru.