ITC Selloff Hits State Insurers Hard: Rs 13,740 Cr Wiped Out in Two Days Amid Cigarette Excise Hike

.'s shares cratered over 14% in the first two trading sessions of 2026, erasing nearly Rs 14,000 crore from the portfolios of three major state-run insurers, with Life Insurance Corporation of India (LIC) bearing the brunt at Rs 11,500 crore in notional losses. The plunge, triggered by the government's surprise hike in excise duties on cigarettes, has spotlighted vulnerabilities in the FMCG giant's tobacco-heavy revenue stream, which accounts for about 40% of its topline. Stock Plunge: From 52-Week Low to Investor Panic ITC's stock tumbled 5% on January 2, touching a fresh 52-week low of Rs 345.25 intraday before recovering marginally to close at Rs 352.10—a 3.8% drop from the prior session. This extended a brutal 9.2% rout on December 31, 2025, capping a two-day evaporation of Rs 35,000 crore from ITC's market cap, now hovering at Rs 4.37 lakh crore. Trading volume spiked 2.5x average, with foreign institutional investors offloading Rs 1,200 crore worth of shares, per NSE data. The catalyst: Finance Minister Nirmala Sitharaman's New Year budget announcement on December 31, imposing a 12% ad valorem excise duty escalation on non-filter and filter cigarettes, effective immediately. Analysts at Motilal Oswal estimate this could shave 200-250 basis points off ITC's FY26 EBITDA margins, prompting downgrades from "buy" to "hold" across brokerages. "The duty hike, aimed at curbing youth smoking amid health lobbies' pressure, disrupts ITC's pricing power in a volume-constrained market," the firm noted.