In just 48 hours, about Rs 72000 crore of market value has been wiped off from a heavyweight stock like ITC, and its biggest impact has been on India’s most trusted investor LIC.

Due to sharp sell off in ITC, the investment value of LIC has decreased by about Rs 10500 crore.

This decline is being considered a big shock for investors. The biggest reason behind this entire sell off is the major change made by the Union Government in the cigarette tax structure, which is going to be implemented from 1 February 2026. Under the new rules, the base GST rate has been increased and new excise duty has also been imposed.

Due to Tobacco being a heavy FMCG stock, ITC is under direct pressure for this policy change.

In this video, the entire impact on stock price and market cap has been explained in simple language.

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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Gst scam: GST officials have revealed a fake input tax credit (ITC) of Rs 15,851 crore in the April-June quarter of the current financial year, which is 29 % higher than the same quarter last year. However, the number of fake firms caught was less than last year.

3558 companies were committing fraud

During the first quarter of FY 26, central and state GST officials have busted a total of 3,558 fake GST firms. Its number is less than 3,840 institutions caught in the same quarter last year. The Chief Minister of all the states led by Goa Chief Minister Pramod Sawant is detecting the theft in tax and there is also talks on ways to stop the input tax credit (ITC) fraud.

The address of 1200 fake companies every month

According to the report of Moneycontrol, an official gave information, on average, about 1,200 fake firms are being traced every month. The number of fake firms caught during April-June is less than last year, which shows that the campaign against fake GST registration has been effective. In the June quarter of FY 26, a scam of Rs 15,851 crore associated with 3,558 fake companies has come to light. Due to this, Rs 659 crore has been recovered with the arrest of 53 people.

What is input tax credit?

Under GST, ITC is a credit for tax paid on any goods or service. Suppose you bought a goods worth 1000 rupees from your supplier with 10 percent GST. That means 100 rupees. Now the supplier should give this 100 rupees to the government.

Later, the businessman sells the goods for 10 percent GST from the supplier and 10 percent at GST i.e. Rs 150. That is, 1000 goods are now being sold in 1500. In this way, the businessman collects GST from retail seller. In such a situation, they should also pay Rs 150 to the government to the government. Now this tax can be claimed as credit or deduction. The government is defrauded by fake companies by passing the wrong ITC.

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Stock market today 29 May 2025: After the US Federal Court’s decision to stop Trump’s Liberation Tariff as unconstitutional, it seems bright in the Asian market to the Indian market. The market started with a rise of 400 points in the Sensex on Thursday, the fourth trading day of the week after a decline of two consecutive days. While the Nifty is open to beyond 24,850. IT stocks are seeing fast today.

Asian market boom

The Asian market saw a boom on Thursday after the US Federal Court described Liberation Tariff as unconstitutional. The court said that President Trump has encroached his rights from the reciperock tariff. After this decision of the court, Nikkea, Japan saw a rise of 1.16 percent. Kospi 1.07 percent, ASS 200 also went up 0.27 percent. While broader topics jumped 1.11 percent. S&P futures saw an increase of 1.44 percent while Nasdaq 100 futures saw 1.76 percent and Dow Jones Futures saw an increase of 1.15 percent.

Fall for the second consecutive day on Wednesday
On this, there was a decline for the second consecutive day on the first Wednesday. The BSE Sensex was at a loss of 239 points. The market came down due to selling in ITC and vehicle shares. The company’s stock was broken after the UK’s multinational company BAT PLC reduced the stake in the ITC that manufactures daily use goods.

The BSE Sensex based on thirty stocks fell 239.31 points, or 0.29 percent, closed at 81,312.32 points. At one time it came down to 307.61 points during trading. Similarly, the Nifty of the National Stock Exchange based on 50 stocks closed at 24,752.45 points with a drop of 73.75 points, or 0.30 percent.

Jiojit Investment Ltd. Research Chief Vinod Nair says that the domestic index remained in loss with a limited scope. The main reason for this is the lack of support from FII and more evaluation of shares. He said that with the deadline for the US fee to be postponed for 90 days, there is concern about the Indo-US trade relations.

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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