ITC Shares Slide Nearly 5 Percent Amid Tax Concerns

ITC Ltd, India’s leading tobacco-to-FMCG conglomerate, witnessed a sharp decline in its share price on the first trading day of 2026. Shares dropped 4.9 percent, marking one of the steepest single-day falls in recent months. The sell-off was triggered by the Finance Ministry’s announcement of a 40 percent GST on cigarettes, tobacco, and bidis effective February 1, 2026.

Adding to the pressure, a sizeable block deal involving over four crore shares further dampened investor confidence. Heavy trading volumes pushed the stock to its lowest level since mid-2024, reflecting heightened concerns over regulatory headwinds and margin pressures in the tobacco segment.

Key Highlights

• ITC shares fell 4.9 percent on January 1, 2026, closing at their lowest level in nearly two years.
• The Finance Ministry announced a 40 percent GST on cigarettes, tobacco, and bidis effective February 1, 2026.
• A large block deal involving more than four crore shares added to selling pressure.
• Trading volumes surged significantly, far exceeding the 20-day average.
• Investor sentiment weakened as higher taxation is expected to impact profitability in ITC’s core tobacco business.
• Analysts note that while ITC’s FMCG and hotel segments remain resilient, tobacco continues to dominate revenue, making regulatory changes critical.
• The sharp fall underscores the sensitivity of tobacco stocks to policy changes and highlights the challenges ITC faces in balancing regulatory pressures with diversification strategies.

Sources: News18, CNBC TV18, Times Now