Shares of cigarette companies rise as government bans e-cigarettes

Mumbai: Shares of cigarette makers surged on Wednesday after the Union Cabinet has approved banning e-cigarettes.

Shares of ITC Ltd rose 1.8%, Godfrey Phillips India Ltd soared 7.8%, VST Industries Ltd gained 1% and Golden Tobacco Ltd climbed 4.5% .

The Union Cabinet in its meeting on Wednesday approved the banning of e-cigarettes in the country.

Earlier, following an advisory from the health ministry, at least 12 states in India had banned Electronic Nicotine Delivery Systems (ENDS). Health officials have proposed jail terms of up to three years, with a penalty of up to ₹5 lakh ($7,000), for repeat offenders against the new rules.

Punjab, Maharashtra, Karnataka, Kerala, Bihar, Uttar Pradesh, Jammu & Kashmir, Himachal Pradesh, Tamil Nadu, Puducherry and Jharkhand have taken steps to ban the use of ENDS, Mint had reported.

In August 2018, the ministry had issued an advisory to all states and union territories to ensure that ENDS, e-cigarettes, heat-not-burn devices, vape, e-sheesha, e-nicotine flavoured hookah, and similar devices that enable nicotine delivery are not sold (including online sale), manufactured, distributed, traded, imported and advertised in their jurisdictions.

The move came in the wake of the Delhi High Court taking strong exception to the Centre’s delay in coming up with appropriate measures to tackle the “new emerging threat" of e-cigarettes in the country. Recently, the Directorate General of Health Services (DGHS), Central Drugs Standard Control Organization (CDSCO), had also issued a similar order.