Alcohol stocks in a tizzy

Last year when CM of Bihar, Nitesh Kumar had announced that he would be declaring Bihar a dry state from 1st April 2016, all major liquor stocks plunged into the red. These companies have a huge market in Bihar and the state too was earning revenue of around Rs 4,000 crore annually from liquor sale. And ironically, it was excise revenue that helped Kumar roll out his government’s most ambitious bicycle scheme for girl students and finance the self-help model to empower women at the grassroots level.

Maybe having a rethink with revenue collection getting affected, Nitesh Kumar yesterday announced waiver of tax on export and bottling fee on Indian Made Foreign Liquor and beer manufactured in the state to help the industry find better market outside Bihar. Thus consumption and trade of liquor remains banned in the state but there is no ban on manufacturing and bottling.

This news has sent all liquor stocks into a tizzy. Globus Spirits hit a new 52-week high today at Rs.110.60, Tilaknagar Industries is up over 5% at Rs.18.50, Radico Khaitan was tantalizingly close to its 52-week high of Rs.130.90 at Rs.128.