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India ban loose cigarettes leads to ITC share 4% down

2016-05-30
According to reports of past several months, Indian government has a strong will to ban smoking and have made a lot of efforts including ban on sale of loose cigarettes. While these actions may not be agood nwes to those cigarette makers. Shares of tobacco companies -- ITC and Godfrey Philips India -- fell sharply by as much as 4 percent Wednesday after the government proposed to amend the anti-smoking law and proposed radical changes, including ban on sale of loose cigarettes.

Based on related fiscal news, ITC scrip lost 3.92 percent to Rs 346.10 on the BSE. Clearly, ITC is not the only one who suffered. Shares of Godfrey Philips fell by 3.38 percent and VST Industries was down 1.86 percent.

The Indian government had moved to amend the anti-smoking law and proposed radical changes, including ban on sale of loose cigarettes and raising the minimum age of a person buying tobacco products to 21 years from existing 18.


Smoking in public places would be fined Rs 1000 from Rs 200. Designated smoking zones in hotels and restaurants are also recommended to be removed.

These are some of the major recommendations in the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) (Amendment) Bill 2015, which were put out by the Health Ministry yesterday to seek suggestions from the public. 


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