ITC’s stock slipped about 10% after the government announced a higher excise duty on cigarettes, a move that directly affects investors holding the shares.
Share price reaction
On January 1, the share price fell to ₹362.70, marking a sharp decline in a single day. Over the past five days the stock has lost nearly 10%, and it’s down about 12% compared with six months ago.
Who owns ITC?
As of the end of the September quarter, the entire company is owned by public shareholders—there are no promoters.
- Mutual funds hold about 14.30% of the stock. The biggest holders are:
- SBI Mutual Fund – 3.26%
- ICICI Prudential Mutual Fund – 2.28%
- Other funds (Nippon Life, UTI, Parag Parikh, Mirae Asset) – each between 1.06% and 1.36%
- Insurance companies own a sizable chunk:
- LIC – 15.86%
- GIC – 1.73%
- New India Assurance – 1.40%
- Foreign investors:
- Tobacco Manufacturers (India) Ltd – 17.79%
- GQG Partners Emerging Markets Equity Fund – just over 2%
Impact on mutual‑fund investors
Because mutual funds together own more than 14% of ITC, the price drop directly reduces the value of their portfolios. Fund managers may need to reassess their exposure, especially if the tax hike continues to pressure margins.
Analyst view
GQG Partners’ chief investment officer, Rajiv Jain, still sees ITC as a growth story. He points out that at a valuation of roughly 23 times earnings, the stock looks “incredibly attractive” and expects double‑digit earnings growth, despite the tax increase.
What lies ahead?
The new excise duty makes cigarettes more expensive, which can cut ITC’s profit from its tobacco business. While the company has diversified into hotels, paper and other segments, its earnings are still sensitive to tobacco regulations, meaning the share price could stay volatile.
Disclaimer
Remember, this is just an overview, not a prediction. Always do your own research and consider your risk tolerance before making any investment decisions.