A Bottom-up Player

Christened as Vazir Sultan Tobacco company, Hyderabad-based VST Industries was incorporated in 1930. It is an affiliate of British American Tobacco (BAT), UK, one of the largest cigarette manufacturers in the world, and holds 32.2 per cent stake in VST. It is the third-largest cigarette manufacturer in the country, next only to ITC and Godfrey Phillips India, operating mainly in the lower-end category of the industry. It primarily exports leaf tobacco to cigarettes manufacturers across the globe. The public holds the largest share in the company to the tune of 49.4 per cent. The cigarette industry in India continues to be impacted by a taxation and regulatory policy framework. The steep increase in the tax on cigarettes, both at the central and at the state level, has led to shifting of consumption to less-taxed or tax-evading tobacco products like bidi, khaini, chewing tobacco and gutkha which are the most dominant forms of tobacco consumption and constitute as much as 85 per cent of total consumption. Cigarette consumption constitutes just 14 per cent of the total tobacco consumption in India. Strengths VST