The fact that ITC started diversifying away from its main tobacco business into hotels and other businesses after almost 70 years of existence was an immense feat of foresight. Especially considering ITC was never a founder-driven company.

They knew tobacco was extremely harmful to health and addictive. When something is bad for people but difficult to ban outright, governments invariably keep regulating and taxing it more. Over time, the taxes become so high and the revenues so significant that the government itself ends up in a strange place: ban it or continue taxing it?

I can’t help but see a parallel with the broking industry. 😬

F&O trading is bad for almost 99% of retail traders. It is unlikely to be banned outright, but regulation will probably keep getting tighter, and taxes like STT will probably keep going higher.

Running a business in an industry with constant government scrutiny over consumer protection is not easy, to say the least. The risk isn’t just economic, but that regulators can ban entire business models almost overnight.

So yeah, the only thing we can do is keep diversifying our business while the core business is still doing well.

Was listening to Intermission by The Ken, an episode on ITC, and this thought stuck with me.

Watch the episode.

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