United Breweries, Som Distilleries, and other liquor stocks gain up to 5% intraday; here’s why

The Andhra Pradesh Cabinet, at its meeting headed by Chief Minister N Chandrababu Naidu on September 18, approved the new liquor policy. The policy seeks to improve management efficiency by establishing a private retail system for the sale of liquor. The new excise policy will come into effect on October 1.

On September 18, Naidu cleared the implementation of a new liquor policy. The new policy seeks to improve management efficiency by putting in place a private retail system for the sale of liquor. The new excise policy will come into effect from October 1. As a part of the policy, the state government has also fixed the price of affordable liquor at ₹99. Under the new policy, the allocation of licences will be done through an online lottery system, and four licence categories have been fixed with fees ranging from ₹50 lakh to ₹85 lakh.

An improvement in retail management is likely to result in a more streamlined customer experience, which can increase consumer demand for liquor, benefiting the manufacturers.

Liquor stocks saw a rally following the Andhra Pradesh government’s decision. Shares of Radico Khaitan surged over 3% to record a fresh 52-week high at ₹2,332 apiece on September 19, following the announcement of the new liquor policy. Radico Khaitan shares pared the gains to trade at ₹2,180 apiece, down by 3.34% at 12:30 pm.

United Breweries shares surged nearly 5% to trade at an intraday high of ₹2,150 apiece. The stock traded at ₹2125 apiece, up by 3.70% on the NSE.

Som Distilleries and Breweries shares gained over 4% to trade at an intraday high of ₹121.99 apiece. The liquor pared some gains and traded at ₹120 apiece, up by 2.81% around 12:30 pm. GM Breweries shares gained over 3% to hit an intraday high of ₹972.6 apiece on the NSE. The stock trimmed some of early gains to trade at ₹912.9 apiece, down by 2.67%, on the NSE.