Cigarette stocks up in smoke

Godfrey Phillips is a big loser today morning. The stock which had closed yesterday at Rs.1129.30, went down to a days low at Rs.933. It has recovered a bit to Rs.968, yet it remains over 14% down.  VST as well as ITC, both are down but the fall is not as sharp as Godfrey.

The reason for this sell off on cigarette counter on unconfirmed news that the Govt is examining a proposal to fully ban foreign direct investment (FDI) in the tobacco sector as part of the broader strategy to reduce consumption of health hazardous products and check illicit fund flow into the segment.

India is signatory to the Framework Convention on Tobacco Control and that means it is responsible for taking steps to cut tobacco consumption. No one from the Govt or the company is yet to confirm this news but the market is disturbed.