Shares of Godfrey Phillips tumbled 17.5 per cent today following reports that the government is working on a proposal to completely ban foreign direct investment (FDI) in the tobacco sector.
Shares of Godfrey Phillips India nosedived 17.54 per cent to Rs 931.25 on BSE. Intra-day, it plunged 18.79 per cent to Rs 917.
Other tobacco companies, however, recovered their early losses and ended in the positive terrain.
Also Read
Shares of Golden Tobacco rose by 3.54 per cent, ITC was up 2.09 per cent and VST Industries gained 1.14 per cent.
A recovery in the broader market, where the Sensex soared 328.37 points to 26,007.30, helped these stocks bounce back.
After making it mandatory to carry larger pictorial warnings on cigarette packets, the government is now working on a proposal to completely ban FDI in the tobacco sector.
At present, FDI is permitted in technology collaboration in any form, including licensing for franchise, trademark, brand name and management contracts in the sector.
However, it is prohibited in manufacturing of cigars, cigarettes of tobacco and tobacco substitutes.
According to sources, the Commerce and Industry Ministry is proposing banning FDI in licensing for franchise, trademark, brand name and management contracts in the sector. It would eventually mean that FDI would be totally banned in the tobacco segment in any form.
