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British American Tobacco is evaluating a possible disposal of a "small part" of its shareholding in India's ITC through an on-market block trade, it said on Monday.

BAT had announced in February that it was "actively working" to reduce its roughly 29% stake in the Kolkata, India-headquartered company which has interests in segments ranging from hotels to consumer packaged goods.

Investors were disappointed, sending its shares down when the UK company opted against a fresh buyback programme last year to focus on investing in new products.

The stake sale would allow the maker of Dunhill and Lucky Strike cigarettes to pay down its debt and move faster towards the leverage range at which it could resume share buybacks.

Bloomberg News, which first reported the news earlier on Monday, said BAT has been speaking with Bank of America and Citigroup about a potential divestment of around $2 billion to $3 billion in ITC stock through block trades.

The report, citing sources, also said that the stake sale could start as soon as this week.

In an earnings call last month, BAT Chief Executive Tadeu Marroco told investors that the cigarette giant wanted to retain a level of influence at ITC and that a 25% stake was required for veto rights.

ITC did not immediately respond to Reuters' request for comment.