Shares of four cigarette companies dropped by 0.47% to 13.23% at 10:30 IST on BSE after reports that the government is working on a proposal to completely ban foreign direct investment in the tobacco sector.
Meanwhile, the BSE Sensex was down 76.35 points, or 0.3%, to 25,602.58.
Godfrey Phillips India (down 13.23%), Golden Tobacco (down 1.2%). VST Industries (down 1.52%) and ITC (down 0.47%) dropped.
After making it mandatory to carry larger pictorial warnings on cigarette packets, the government is now working on a proposal to completely ban foreign direct investment (FDI) in the tobacco sector, the report suggested. The Commerce and Industry Ministry is proposing to even ban FDI in licensing for franchise, trademark, brand name and management contract in the sector, report added. The ban would eliminate the possibility of indirect flow of overseas funds to the tobacco sector, even through foreign technology collaboration including licensing for franchise, trademark and brand name.
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