EQUITIES

Liquor stocks fall as Delhi govt hikes excise duty by 70%; United Breweries, Radico Khaitan drop up to 6%

liquor stocks, special coronavirus fee

Liquor stocks fell as much as 6 per cent in an otherwise strong market on Tuesday. In Delhi, the liquor stores were opened as part of the new guidelines related to the ongoing lockdown due to coronavirus. But people flouted social distancing norms and flocked around liquor shops. Following this, Arvind Kejriwal-led Aam Aadmi Party (AAP) government in Delhi imposed a ‘special coronavirus fee’ by increasing excise duty on liquor by 70 per cent. However, analysts expect that the bumper sale of liquor will last for a short period of time. “Cheers accompanying the reopening of liquor stores could be short-lived as companies said existing stock at distributors will be exhausted after the initial round of stockpiling and replenishment could take a month or so,” research and brokerage firm Nirmal Bang said in its research report.

United Breweries share price fell the most as much as 6 per cent to Rs 912, while United Spirits shares were down 4.5 per cent to Rs 517.30. Similarly, Radico Khaitan shares were down 5.6 per cent to Rs 298.75 apiece on BSE in noon deals. In the previous session, shares of alcohol companies rose up to 17 per cent. Associated Alcohols and Breweries share price gained 16.76 per cent on Monday to start the week’s trading up at Rs 198.50 per share.

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In the national capital Delhi, the government allowed the reopening of the liquor shops outside the coronavirus containment zones with several guidelines amid nationwide lockdown. “Liquor stores and pan shops will be allowed to function in green zones while ensuring a minimum six feet distance from each other and ensuring that not more than five persons are present at one time at the shop,” the statement from the Ministry of Home Affairs (MHA) said.

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