India’s largest insurance company, Life Insurance Corporation of India (LIC) has suffered huge losses. LIC has suffered a loss of ₹11,468 crore in the last two days. LIC invests in many listed companies, one of which is FMCG company ITC. ITC shares have fallen more than 13 percent in the last five days. This has caused huge losses to both common investors and LIC.
Why are ITC shares falling?
ITC is a leading FMCG company in India. A large number of investors have invested in it. LIC also has a significant stake in the company. The continuous decline in the share price of ITC has become a big headache for LIC. A large part of ITC’s earnings come from its cigarette business. The central government has announced the imposition of new excise duty on cigarettes, which is expected to affect the company’s earnings, and its shares are falling due to this fear. Tobacco products are already expensive in the country, and the new excise duty will further increase prices. This has increased concerns about the impact on the business of cigarette companies.
How much is LIC’s investment?
LIC holds about 16 percent stake in the company. The total value of this stake on December 31 was about ₹80,028 crore, which has now come down to ₹68,560 crore. According to a report by Moneycontrol, the shareholding pattern of ITC is quite unique. At the end of the July-September quarter of FY26, 100 per cent of ITC’s shares were held by public shareholders, and there is no promoter or promoter group.
Loss to other companies too
Along with LIC, many other companies have also invested in ITC. General Insurance Corporation of India (GIC) holds 1.73 percent stake, and The New India Assurance Company Limited holds 1.4%. General Insurance has suffered a loss of ₹1,254 crore and New India Assurance has incurred an estimated loss of ₹1,018 crore in the last two days. Overall, ₹13,740 crore has been wiped out from the portfolios of the three government companies in one fell swoop. It is important to clarify that this loss figure is an estimate. If these three companies sell their shares today, the loss will be certain, but if they wait for a rise in ITC’s share price, this figure may be less.
ITC shares closed at ₹350.10 in the last trading session, down 3.78%. It has fallen by 13.15% in the last five days alone. Its 52-week high is ₹491 and low is ₹345.25. ITC’s business is spread across many sectors, but its main source of income is the cigarette business. This increased concerns about the company’s balance sheet, leading to heavy selling of shares and a fall in price. However, this type of nervousness usually does not last long. Therefore, it is expected that this downward trend will reverse in the coming days.
