The shares of GM Breweries and Sula Vineyards made significant gains on June 11 after Maharashtra government approved significant hike in excise duties on liquor. GM Breweries shares skyrocketed nearly 19 percent to trade at Rs 853 apiece, while those of Sula Vineyards jumped 10 percent to hover around Rs 326 apiece.
The Maharashtra government on June 10 approved a hike in excise duty on Indian Made Foreign Liquor (IMFL), country liquor, and imported alcohol. The state government also approved the introduction of a new category, Maharashtra Made Liquor (MML).
The grain-based Maharashtra-made liquor (MML) will only be made by local manufactures, who must register new brands under this category. It will have a country liquor tax structure but will only be sold through FL-2 and FL-3 licensees. The state estimates that the segment currently has a size of 5 to 6 crore litres, and has the potential to grow up to 10 to 11 crore litres, generating up to Rs 3,000 crore in additional revenue, according to The Indian Express.
This move will likely benefit the Mumbai-based GM Breweries.
On the other hand, wine and beer have been exempted from the new excise duty hikes. Sula Vineyards, which is mainly known for its wide range of wines under the name 'Sula', saw a sharp rise in its share price due to the exemption.
The two stocks have bucked the trend to record significant gains. The other liquor stocks strongly tumbled on the back of the rise in duty on Indian Made Foreign Liquor (IMFL). Allied Blenders & Distillers, Radico Khaitan, United Spirits and other stocks were down up to 7 percent.
Here are the latest duty rates for a 180 ml bottle of different varieties of liquor:
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
