ITC share crash impact: Nifty FMCG index falls 3% to near 9-month low

Nifty FMCG index

• Nifty FMCG index fell over 3% to a nine-month low on January 1
• ITC shares dropped 10% after new excise duty on cigarettes was imposed
• Other FMCG stocks like United Spirits and Tata Consumer also saw declines

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The Nifty FMCG index sharply dropped more than 3 percent to a near nine-month low on January 1 as heavyweight ITC shares crashed on new excise duty rules.

The FMCG index emerged as the top losing sectoral index on the market today, falling to 53,478.70. This is the lowest level seen by the index since early April 2025.

Why ITC shares are crashing today?

ITC shares dropped 10 percent to trade at Rs 362.70 apiece on Thursday after the government imposed new excise duty on cigarettes. The stock is also the top loser on the benchmark indices Sensex and Nifty.

The Parliament in December approved the Central Excise (Amendment) Bill, 2025, clearing the way for a sharp increase in duties on cigarettes and other tobacco products. It replaces a temporary levy on cigarettes and tobacco products.

The excise duty would be imposed on cigarettes in addition to a 40 percent GST, according to an order issued late on Wednesday. The finance ministry notified that an excise duty of Rs 2,050–8,500 per 1,000 sticks, depending on cigarette length, will take effect from February 1.

The duty translates into a 22-28 percent increase in overall costs for 75-85 mm cigarettes, analysts at ICICI Securities said. "Cigarettes longer than 75 mm account for roughly 16% of ITC's volumes and are likely to see price increases of 2–3 rupees per stick as a result of the levy," they said.

Other FMCG losers:

United Spirits shares fell around 3 percent, while Radico Khaitan shares were down over 1 percent. Tata Consumer Products, Dabur India, Emami and United Breweries shares fell around 1 percent each.

Hindustan Unilever and Britannia Industries shares were trading in the red with marginal losses, while Varun Beverages, Nestle India, Marico and Colgate Palmolive shares were trading in the green with marginal gains.

Godrej Consumer Products and Patanjali Foods shares were up 1 percent each.

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