India's ITC drops after govt to form group for tobacco tax policy

The Indian government has decided to constitute an expert group to develop a comprehensive tax policy for all tobacco products

  
An investor watches the share index at a local share and stock market in the northern Indian city of Chandigarh.

An investor watches the share index at a local share and stock market in the northern Indian city of Chandigarh.

REUTERS/Ajay Verma

** India's top cigarette maker's shares fall as much as 5.3% to 248.70 rupees - eye worst day in nearly 10 months

** The Indian government has decided to constitute an expert group to develop a comprehensive tax policy for all tobacco products in the country, a health ministry document showed

** The expert group will analyse the existing tax structure for all tobacco forms and suggest tax rates during the 2022-2023 budget

** According to analysts at Jefferies, this move has clearly raised concerns on tobacco taxation in the run-up to the budget in February and as a result ITC stock could remain range-bound and even go down closer to the budget

** Shares of smaller cigarette manufacturers VST Industries down about 2%, Godfrey Phillips India down about 1%

** Despite session's losses, ITC stock is still up ~17% YTD

(Reporting by Shivani Singh in Bengaluru) ((ShivaniSingh1@thomsonreuters.com; +91 89 6969 2349))


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