GM Breweries, Sula Vineyards shares surge up to 19% even as liquor set to get expensive in Maharashtra; here's why

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.