Sunfeast, Bingo, Classmate, Aashirvaad Aata, Mint-o-fresh, Fiama, Vivel, Savlon, and many more brands in different sectors, all handled by just one Indian conglomerate; ITC. But how did ITC build this huge empire? Let us discuss that and 10 mind-blowing facts about the company.

Fact No. 1: Laying down the strong foundation

Initially known as the Imperial Tobacco company, ITC was incorporated in 1910 with its first office in Kolkata. Later in 1913, the company launched its state-of-the-art tobacco factory in Bangalore. On its 16th birthday, ITC bought land in Kolkata for a new office to mark the beginning of an eventful journey into India’s future. Today, the office is known as Virginia House, one of Kolkata’s most important landmarks. As of mid-2020, ITC’s tobacco business contributed around 74% to its profit.

Fact No. 2: Small initiatives turning big

In 1925, ITC had set up a printing and packaging business as an aid to its cigarette business. Now, apart from making cigarette boxes, ITC also works with brands such as Nokia, Colgate Palmolive, Tata Tea, and others for packaging. Today ITC is India’s most sophisticated packaging house.

Fact No. 3: Venturing into the luxury hospitality business

In 1975, ITC ventured into the hotel business by acquiring a hotel in Chennai, which is now known as My Fortune. Today, ITC has set a bar for luxury hotels with four brands namely ITC Hotels – Luxury Collection, WelcomHotels, Fortune Hotels, and WelcomHeritage. As a part of its international expansion plan, ITC is building a hotel in Colombo, Srilanka, which is expected to start by 2021.

Fact No. 4: ITC leads in reducing carbon emissions

ITC consistently works towards expanding its positive carbon footprint through energy conservation and the use of renewable sources of energy. In fact, 41% of the total source of ITC’s energy requirement is renewable. What’s more, ITC is the only company in the world to be 15 yrs carbon positive, 18 yrs water positive, and 13 yrs solid waste recycling positive.

Fact No. 5: Doing business while being environmentally friendly

A lot of cigarettes and FMCG products need packaging. FMCG cartons, electrical insulation papers, decorative laminate, writing and printing papers, ITC makes all of it. Even in the stationery market, ITC has about 25% market share under the name Classmate, which has a consumer spend of over Rs. 1,500 cr.

But to manufacture these, a lot of wood is required. To overcome the depletion of wood, ITC has developed a farm plantation program, where it offers saplings to farmers at a nominal fee along with extensive support and knowledge for efficient planting. The company also provides farmers with a buyback guarantee once the tree matures. However, farmers are free to sell the wood to others also. As of March 2020, it had plantations standing over 8,00,000 acres of land.

Fact No. 6: Digitizing and empowering the agri-business

ITC’s agri-business division is one of India’s largest exporters of agricultural commodities helping about 40 cr farmers with e-Choupal by providing them with Internet access. This initiative helps in informing and empowering the farmers to improve the quality of agricultural goods. There are 6,100 e-Choupals in operation in 35,000 villages in 10 states. Each installation serves an average of 600 farmers in the surrounding ten villages within about a 5 km radius.

Fact No. 7: Turned small divisions into full-fledged companies

In 2000, ITC’s information technology business division was spun off into a wholly-owned subsidiary, ITC Infotech India Limited. Today it’s one of the fastest-growing global IT services companies providing outsourced IT solutions. ITC also made it into the list of the world’s top 100 outsourcing companies of 2020.

Fact No. 8: Excelling without an owner

When you think of Reliance, you get a picture of Ambani, if you think of Tata Motors you get a picture of Ratan Tata. What about ITC? Well, it’s a professionally managed company with 0% promoter holding.

Fact No. 9: Ramping up the game in FMCG

Although the cigarettes business still brings most of the profits, ITC is rapidly expanding its presence in the FMCG sector. Its FMCG product reaches every 2nd household in India. During FY 2020, ITC launched 60 new products in the non-cigarette fast-moving consumer goods. Its sales have also increased by 15% y-o-y.

Fact No. 10: ITC made it to the list of top market cap companies in India

With a wide variety of products and services, multiple brands, manufacturing products ranging from biscuits, flour, perfumes, scent sticks, and matchsticks, to providing services in IT, hospitality and the giant tobacco business; ITC stands 15th in the list of top companies with a large market capitalization in India. Today, its stock price has grown more than 10 times since its IPO.

Aradhana Gotur

7 Comments

  1. The information shared about your ITC company is very interesting and encouraging. In my view, if the company separates the cigarette business, then ESG compliance will also be done and the prospect of unlocking the value is also made.

    • Aradhana Gotur Reply

      Thanks for your view, that’s a good approach to look at the stock!

  2. Nikhilesh Kumar Jha Reply

    Well explained the business model of ITC and a very nice guidelines on investment.

We'd love to hear your thoughts 🥰