Rs 8,150 Crore gone in a Day: LIC takes Biggest Hit in ITC’s Free Fall

A steep 13% drop in the ITC shares on Tuesday weighed heavy on its largest shareholder, Life Insurance Corporation of India (LIC), which suffered a notional loss of over Rs 8,150 crore for the day.

The state-run insurer lost over Rs 7,000 within the first few minutes of trading. Selling pressure on the counter intensified as the session progressed. The insurer eventually lost Rs 8,152 crore on its ITCBSE 2.23 % investments, as the cigarette maker saw its market value contracting by Rs 50,045 crore to Rs 3.46 lakh crore.

IC held 16.29% in the cigarette maker as of June 30, 2017. Domestic insurance companies together lost Rs 11,250 crore, while FPIs took a Rs 10,000 crore hit in what was the biggest fall in the ITC stock in 25 years. LIC has been steadily raising stake in the cigarette maker for some time now, from 12.63% four years ago and 14.34% as of June 2016. Sukumar Rajah of Franklin Templeton Investments said his firm looks at three important matrix in stocks: quality, sustainability and growth. “An industry like tobacco has very poor sustainability and because of this issue, it has never been a big portion in our portfolio. Today is no different,” Rajah told ET Now.