Mumbai: Market value of FMCG major ITC on Monday took an over Rs 17,000 crore hit as its shares sharply tanked on fears that a proposal to hike excise duty on cigarettes would be accepted.
The shares of the company, which makes cigarettes, plunged by 6.50 percent, its biggest drop since September 2013, to close at Rs 314.05 apiece on the BSE.
With the decline in the share price, the FMCG major's market cap fell by Rs 17,377 crore. The market valuation of the company today stood at Rs 2.49 lakh crore as against Rs 2.67 lakh crore on the previous trading day i.E. June 20.
On the National Stock Exchange (NSE), shares of ITC dropped by 5.42 percent to settle the day at Rs 314.95 apiece, from their previous close.
"ITC...Closed down about 6 percent on back of news reports that the government is contemplating a steep hike in excise duty on cigarettes," Kotak Securities Vice President- Private Client Group Research Sanjeev Zarbade said.
Last week, Health Minister Harsh Vardhan had written to Finance Minister Arun Jaitley asking him to impose a steep uniform hike of Rs 3.5 per cigarette so as to make their cost prohibitive and discourage consumption.
