Share price of ITC surged over 4% after the announcement that it has entered into an agreement with Sunrise Foods for an acquisition of a 100% stake. Fast-moving consumer goods (FMCG) major ITC was the top gainer on NSE on Tuesday.
In a move to scale up its non-cigarette FMCG business and de-risk its business model, ITC said yesterday that it has entered into a share purchase agreement (SPA) on May 23 to acquire the spices firm Sunrise Foods Private Limited (SFPL) for an undisclosed sum. ITC stock was the top gainer in the early trade, rising 4.6% to the day's high of Rs 194.95.
On BSE, ITC stock opened with a gain of 2.07% and later climbed 4.61% to an intraday high of Rs 194.95. The stock has gained 11.6% in one week and 5.83% in one month. However, the price value has fallen over 19% since the beginning of the year. The stock currently trades higher than its 5, 20 and 50 day moving averages but lower than 100 and 200-day moving averages.
The market capitalisation of the large-cap stock stood at 2,34,167.01 crore, as of today. While the size of the deal is unknown, estimates suggest it is at least 7 to 8 times the size of deals ITC has carried out in the past. As per industry insiders, this is ITC's biggest deal in the past two decades.
"ITC Limited has entered into a Share Purchase Agreement (SPA) on May 23, 2020 to acquire 100% of the equity share capital of Sunrise Foods Private Limited (SFPL), a company primarily engaged in the business of spices under the trademark 'Sunrise', subject to fulfilment of various terms and conditions as specified in the SPA," the company had said in a statement on Monday.
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