ITC gave a big blow to LIC
The beginning of the new year 2026 has been like a nightmare for stock market investors, especially the government insurance company LIC. As soon as the government announced the imposition of excise duty on cigarettes, the shares of the country’s leading FMCG company ITC fell apart like a pack of cards. This huge fall in the shares of ITC in just two days has given a big blow not only to the common investors but also to the country’s largest insurance company LIC. A reduction of thousands of crores of rupees has been recorded in the holding value of LIC.
Shares fell face down in two days
First two trading sessions of the year 2026 ITC Proved to be very disappointing. The effect of the government’s strict decision to increase the tax on cigarettes was that ITC shares fell by more than 14 percent. The situation became so bad that during trading on January 2, the share fell to the level of Rs 345.25. This is the lowest level of this stock in the last 52 weeks.
This decline is also important for market experts because no promoter or promoter group has any stake in ITC. According to the data for July-September quarter of financial year 2026, 100 percent stake of the company is held by public shareholders, due to which this decline has had a direct impact on institutional investors and the general public.
Biggest blow to LIC’s coffers
LIC has suffered the biggest brunt of this decline in ITC. LIC’s stake in ITC is 15.86 percent, which is a huge share. If we look at the figures, the total value of LIC’s investment in ITC as on December 31, 2025 was Rs 80,028 crore. But after heavy selling in shares this value came down to Rs 68,560 crore. That is, within just two days, LIC has suffered a loss of more than Rs 11,468 crore on its holding.
Its impact has been visible not only on LIC but also on the balance sheets of other government insurance companies. General Insurance Corporation of India (GIC), which holds 1.73 per cent stake in ITC, suffered a loss of Rs 1,254 crore. At the same time, New India Assurance Company suffered a loss of Rs 1,018 crore due to 1.4 percent stake. In this way, the three government companies have suffered a total loss of about Rs 13,740 crore.
Understand the mathematics of notional loss
It is a matter of relief for investors that this huge loss suffered by the insurance companies is currently ‘Notional Loss’. This means that this loss is only on paper. The companies will incur real losses only if they sell these ITC shares at the current low levels. Since insurance companies invest with a long-term perspective, they often absorb such market fluctuations.
In this period of decline, the market capitalization (M-Cap) of ITC has also been badly affected. In two days of selling, the market value of the company decreased by Rs 72,000 crore and now it has come to Rs 4,38,639 crore. However, a slight recovery was seen at the end of trading on January 2 and the stock closed at Rs 350.10, down nearly 4 per cent. On the other hand, amidst this turmoil, LIC’s own share managed to rise by 1 percent and close at Rs 861.
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Disclaimer: This article is for information only and should not be considered as investment advice in any way. TV9 Bharatvarsha advises its readers and viewers to consult their financial advisors before taking any money-related decisions.