ITC's crash forces LIC to lose Rs 7,000 crore

Mumbai: Cigarette maker ITC had its worst trading day on Monday when its stock fell to a more than 20 years low. It was lowest performance of ITC since 1992. Shares of ITC crashed by up to 15 per cent thus denting the value of largest shareholder Life Insurance Corporation of India.

LIC lost Rs 7,000 crore in just 30 minutes of trading in the morning. As of March 31, 2017, the state-owned insurance major held a 16.29 per cent stake in FMCG major ITC, according to a report in The Economic Times.

"Domestic insurance companies together lost Rs 10,000 crore, while FPIs took a Rs 9,000 crore hit in what was the biggest fall in the ITCBSE - 11.59 per cent stock since 1992," the ET report said.

LIC has increased its stake in ITC over past few years. The insurance giant upped the stake in ITC from 12.17 per cent in 2013 to 14.3 per cent in 2016.

ITC saw its worst performance due to an additional cess on cigarettes that came into effect from July 17 midnight. The GST Council at its emergency meeting called on Monday decided to increase the cess on cigarettes as effective tax on tobacco after GST's introduction make cigarettes cheaper by 6-7 per cent.