ITC’s share price slumped sharply after the government announced a new excise duty on cigarettes, wiping out billions of rupees in value for big state insurers.
Why ITC Shares Fell
The government’s new excise duty raises the cost of each cigarette. Investors fear this will cut ITC’s earnings, so they started selling the stock quickly.
Impact on State‑Owned Insurers
- LIC holds a 15.86% stake in ITC. At the recent low of Rs 345.25, its holding is worth about Rs 68,560 crore, a notional loss of roughly Rs 11,468 crore.
- GIC owns 1.73% of ITC, now worth around Rs 1,254 crore less than before.
- New India Assurance holds 1.4% and faces a loss of about Rs 1,018 crore.
Together, the three insurers have seen a paper loss of roughly Rs 13,740 crore in just two trading days.
Recent Price Movement
ITC fell 5% on Jan 2, touching a 52‑week low of Rs 345.25, before closing the day about 4% lower at Rs 350.10. In the last five days the stock is down more than 13%, and it’s down over 15% in the past six months.
What This Means for Retail Investors
While the losses are only “on paper” until shares are actually sold, the steep drop shows how policy changes can quickly affect stock prices. Investors should watch any further tax updates and consider the risk of holding large‑cap stocks that are sensitive to regulatory news.
Remember, this is perspective, not a prediction. Do your own research before making any investment decisions.