Archive · 2 Jan 2026
ITC Shares Drop on Cigarette Duty Hike
ITC is a big company in India that makes cigarettes.
The government said they will increase the tax on cigarettes and pan masala, which makes them more expensive.
When people heard this, they sold ITC's shares, and the price went down a lot.
This is the lowest the price has been in a long time.
The company lost a lot of money because of this.
Some people who own shares in ITC are big companies like LIC and SBI Mutual Fund.
Experts think this tax increase will make people buy fewer cigarettes and maybe even buy them from places that don't follow the rules.
The government wants to make cigarettes more expensive to help people quit smoking, but this makes it harder for ITC to sell their products.
The new taxes will also apply to pan masala, which is another product that ITC makes.
The government is doing this to replace an old tax that was going to end soon.
ITC shares dropped 9.69% to Rs 363.95, the lowest in a long time.
Market capitalisation decreased by Rs 45,104 crore.
Government increased excise duty on cigarettes and pan masala, effective from February 1, 2026.
Analysts predict higher duties will reduce cigarette volumes and increase illicit market concerns.
Major shareholders include LIC, SBI Mutual Fund, and ICICI Prudential Mutual Fund.
- Who
- ITC and its shareholders
- What
- Share price drop due to excise duty hike on cigarettes
- When
- Effective from February 1, 2026
- Where
- India
- Why
- Government announced higher excise duties on cigarettes and pan masala
Government
Cigarette Companies
Tax Increase
Government
The government increased excise duty on cigarettes to discourage smoking and generate more revenue.
Cigarette Companies
Cigarette companies argue that the tax increase will hurt their sales and profitability, leading to potential job losses and increased illicit trade.
- Company
- ITC
- Market Cap Loss
- Rs 45,104 crore
- Share Price Drop
- 9.69%
- Lowest Share Price
- Rs 363.95
- Effective Date of Duty Hike
- February 1, 2026
- Cigarette Volume Growth (Dec Qtr)
- 5.5% YoY
- Cigarette Volume Growth (Sep Qtr)
- 6% YoY
- Major Shareholders
- LIC, SBI Mutual Fund, ICICI Prudential Mutual Fund, GQG Partners, GIC
- Number of Small Investors
- 35.73 lakh
- Excise Duty Range
- Rs 2,050-8,500 per 1,000 sticks
- GST on Cigarettes
- 40%
- GST on Pan Masala
- 40%
- Health and National Security Cess on Pan Masala
- 48%
Sources
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