Life Insurance Giant “LIC” lost Rs Seven Thousand Crore just in 30 minutes. This is all due to free fall of ITC share on stock market. A steep free flow of ITC share in morning trading triggered such a huge loss to LIC. LIC held 16.29 per cent in the cigarette maker as of June 30, 2017. 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 ITC since 1992.
GST cess is major reason for such a huge loss to LIC and ITC. GST Council raising the cess on cigarettes to take away an estimated Rs 5,000 crore annual ‘windfall’ from the manufacturers, LIC and other insurers are set to take a big hit in the notional value of its investment. GST decision will force the company to hike prices sharply, which may impact volumes.