LIC loses Rs 11,500 crore as ITC shares decline up to 14% in two days: Here's why

LIC's stake in ITC

• ITC shares plunged 14 percent in two days after new excise duty on cigarettes
• State insurers lost Rs 13,740 crore in notional wealth from ITC's sharp selloff.
• ITC's market cap fell by Rs 72,000 crore in two days, now at Rs 4,38,639 crore

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The shares of ITC have seen sharp decline over two days after government’s new excise duty on cigarettes. The sharp selloff caused significant notional losses for its investors, including state-owned insurers like LIC.

ITC shares plunged 5 percent to hit a fresh 52-week low of Rs 345.25 apiece on January 2, before paring some losses. The stock has fallen more than 14 percent in just two trading days in 2026.

Selloff wipes off Rs 13,740 crore from 3 insurers' wealth:

According to data on ITC's shareholding pattern as at the end of the July-September quarter of the financial year 2026, the entire 100 percent stake in the company is held by public shareholders and no promoter or promoter groups.

Life Insurance Corporation of India (LIC) held 15.86 percent stake in ITC, while General Insurance Corporation of India (GIC) held 1.73 percent stake, and The New India Assurance Company Limited held 1.4 percent stake.

LIC would be sitting at a notional loss of more than Rs 11,468 crore due to ITC’s selloff. Its total stake would be worth Rs 68,560 crore at the record low level, down from Rs 80,028 crore at December 31’s closing level.

Similarly, General Insurance Corporation of India (GIC) would have incurred a notional loss of around Rs 1,254 crore and New India Assurance Company at Rs 1,018 crore in just two days due to ITC’s selloff.

Hence, the sharp selloff wiped off Rs 13,740 crore from these three state-run insurers' portfolio in just two days. It is important to note that these are notional losses as these insurers will incur the losses only if they sell at these 52-week low levels.

Also read: Brokerages bearish on ITC as excise duty on cigarettes may hit earnings growth

ITC share price:

ITC shares later recovered some losses to close around 4 percent lower at Rs 350.10 apiece on January 2. The stock has fallen more than 13 percent in the past five days, and over 15 percent in the past six months.

The sharp selloff wiped off Rs 72,000 crore from the company’s market capitalisation in just two days. It now stands at around Rs 4,38,639 crore. The stock currently has a P/E ratio of 22.59.

LIC shares closed nearly 1 percent higher at Rs 861 apiece, while General Insurance Corporation of India shares ended in the session with marginal gains at Rs 380 apiece.