After the government’s new excise duty on cigarettes, there has been a huge decline in ITC shares in two days. This has had a direct impact on the investment of Life Insurance Corporation of India (LIC). On January 2, ITC shares fell 5 percent to their new 52-week low of Rs 345.25 per share. However, there was some recovery later. ITC shares fell by more than 14 percent in the first two trading sessions of the year 2026 alone.

There was a stir due to the fall of shares

According to the data of shareholding pattern for July-September quarter (FY26), 100 percent stake of ITC is held by public shareholders. It has no promoter or promoter group. LIC alone holds 15.86 percent stake in ITC, while General Insurance Corporation of India (GIC) holds 1.73 percent and The New India Assurance Company Limited holds 1.4 percent.

LIC has suffered a paper loss of Rs 11,468 crore due to the sale of ITC shares. Where at the closing level of December 31, the total value of LIC’s stake in ITC was Rs 80,028 crore. At the same time, now it is at a record low of Rs 68,560 crore.

In this way, due to the sale of ITC shares, Rs 13,740 crore was wiped out from the portfolio of these three government insurance companies in just two days. It is important to note here that this is a notional loss. Unless insurance companies sell shares at the 52-week low level, it will be considered a paper loss only.

ITC loss of Rs 72000 crore

ITC shares fell almost 4 percent on January 2 and closed at Rs 350.10 per share. The stock has fallen more than 13 percent in the last five days and more than 15 percent in the last six months. Due to this, Rs 72,000 crore has been reduced from the market capitalization of the company in two days, which is now approximately Rs 4,38,639 crore. The current P/E ratio of the stock is 22.59.

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Rs 50,000 crore wiped off market cap in one fell swoop, ITC shares fell heavily due to a government decision

ITC shares: On Thursday, the shares of ITC, the largest cigarette manufacturing company in India, suffered the biggest decline in a single day in the last six years. The company’s shares are under pressure because the government late on Wednesday night announced increase in excise duty on cigarettes, tobacco and beedis. Due to this, the shares fell by 10 percent and due to this the market capitalization of the company reduced by more than Rs 50,000 crore.

Share reached low level

During Thursday’s session, ITC shares fell 5.92 percent to Rs 379.1 on BSE. At the same time, in intra-day it fell by 5.96 percent to Rs 379.00. This is the record low for ITC shares in the last one year.

The Finance Ministry has decided to impose GST on tobacco, cigarettes and beedis at the rate of 40 percent. This has caused a big blow to the company’s shares. The new rates will be effective from February 1. This means that the prices of tobacco related products will increase from this day. Due to increase in excise duty, prices may increase by at least 15 percent. Due to this, investors sensed losses in the future, due to which there was movement in the shares.

The condition of Godfrey Phillips India is even worse.

The condition of Godfrey Phillips India, a company selling Marlboro cigarettes, was even worse. Its shares have fallen by 19 percent. This is the biggest decline since November 2016. This trend of decline in shares started since the Finance Ministry has said to impose excise duty of Rs 2,050 to Rs 8,500 on per 1,000 cigarette sticks depending on the length of the cigarette from February 1. This tax has been imposed on top of the existing 40 percent Goods and Services Tax (GST). In such a situation, analysts are warning of reduction in volumes and pressure on prices.

Jefferies wrote in a note, “Many things are still not clear, but our calculations show that if NCCD continues, the tax increase could be more than 30 percent. Even if NCCD is included in it, the impact will be more than 20 percent. Jefferies has termed this as negative.

Disclaimer: (The information provided here is being given for information only. It is important to note here that investing in the market is subject to market risks. Always consult an expert before investing money as an investor. ABPLive.com It is never advised for anyone to invest any money here.)

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The Indian stock market witnessed a strong strength on 23 May 2025, in which ITC Limited shares performed brilliantly. The company’s share prices are steadily increasing, behind which there are many important reasons, such as the best quarterly results, the declaration of dividend and the acquisition of new companies. Come, let us know in detail whether this pace of ITC shares can continue even further.

Strong quarterly results raised investors’ expectations

The ITC introduced the results of the March 2025 quarter, recording a 10 per cent increase in the company’s total income. The company’s revenue was Rs 203.7 billion, which is much better than the previous year. In addition, different ITC businesses, such as Agri-Business, Cigarettes and FMCG (Fast-Moving Consumer Goods) have performed well.

However, the net profit of the company was Rs 198 billion, including a lump sum profit of Rs 151.8 billion (from hotel business dimensions). If this lump sum profit is removed, the ITC’s core profit was Rs 46.6 billion, which was in accordance with the market expectations.

Dividend’s declaration increased investors confidence

ITC has announced an interim dividend of Rs 7.85 per share to its shareholders. Earlier, a dividend of Rs 6.50 per share was also given in February 2025. In this way, a dividend of a total of Rs 14.35 per share will be available in the financial year 2024-25.

Depending on the current price (Rs 436.30) of the stock, this dividend yield is about 3.3 per cent, which is more than many bank fixed deposits (FD). This is the reason that the trend of investors has increased towards ITC shares.

Increased chances of growth from new acquisitions

ITC has recently acquired several new companies, which has expanded its business. These include 24 Mantra Organic, Mother Sparsh and Prasuma (Meetigo). Apart from this, the company has also made a big deal in the paper and packaging sector. All these steps can be helpful in creating new revenue streams for ITC.

There are also challenges present

Although ITC has performed well, there are some challenges. Pressure of government rules on cigarette business – The government can have continuous tax on tobacco products and strict rules can affect this segment of ITC.

There is also competition in the FMCG sector. ITC will have to pay more attention to the marketing and innovation of its products due to increasing competition with Hul, Nestle and other companies. Analysts believe that ITC shares may still grow further, as ITC shareholders may get additional benefits after the hotel business dimpar is formed a separate company. The prospects of growth in FMCG and Agri-business are strong. The dividend yield is still attractive, which can give returns to long-term investors.

Disclaimer: (Information provided here is being given only for information. It is necessary to tell here that the investment market is subject to risks. Always consult expert before investing as an investor. Never is advised to invest money from Abplive.com.

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