Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Market / Stock-market-news/  Liquor stocks gain after Patna HC revokes liquor ban in Bihar
BackBack

Liquor stocks gain after Patna HC revokes liquor ban in Bihar

United Spirits's stock rose 6%, United Breweries was up 2.7%, Pioneer Distilleries jumped 5.6% and Globus Spirits soared 11% among others over Patna HC ruling

Patna HC ruling comes only 5 months after Nitish Kumar govt decided to impose a total ban on alcohol in towns and cities. Photo: Hindustan TimesPremium
Patna HC ruling comes only 5 months after Nitish Kumar govt decided to impose a total ban on alcohol in towns and cities. Photo: Hindustan Times

Bengaluru: A Patna high court struck down Bihar’s Prohibition of Liquor Act and termed it ‘illegal.’ That led to a jump in liquor companies’ stocks on Friday.

United Spirits Ltd rose 6%, United Breweries was up 2.7%, Pioneer Distilleries Ltd jumped 5.6% and Globus Spirits soared 11% among others after news of the court’s ruling.

The ruling comes only five months after the Nitish Kumar government decided to impose a total ban on alcohol in towns and cities.

“Sentimentally big positive for liquor players, especially united Spirits, United Breweries, Globus Spirits," wrote Abneesh Roy, senior vice-president at Edelweiss Securities Ltd in a note.

“Need to see how Bihar government responds to this. This is the second state which is likely to reverse a ban after Kerala due to different reasons," wrote Roy adding that Bihar accounts for 2-3% of liquor companies’ sales.

Also Read: Patna high court quashes Bihar notification banning liquor

A month after the new Left Front government came to power in Kerala, the chief minister Pinarayi Vijayan signalled in an interview to Mint that he supports abstinence more than the idea of prohibition in a stage by stage manner, which was the crux of the previous government’s liquor policy. This week, the government made its first major step in this direction, by doing away with a two-year-old custom of permanently shutting down 10% of government-run liquor outlets on the occasion of Gandhi Jayanti.

Tax revenue from liquor sales in Bihar was Rs3,400 crore in 2014-15, according to a November research report by brokerage Edelweiss Securities.

In March, less than a month before the ban, Mint reported that companies were anticipating a 5-20% decline in sales due to prohibition, with some mass-market companies gaining at the behest of country liquor.

Other liquor stocks that moved higher included those of Som Distilleries & Breweries (5%), Empee Distilleries (11%), GM Breweries (8.2%), Tilaknagar Industries (8%), Radico Khaitan (8%), Jagatjit Industries (5%) and Pincon Spirit (5%).

(Nidheesh M.K. contributed to this report)

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 30 Sep 2016, 02:56 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App