The Competition Commission of India () penalty of ₹752 crore on is a significant sentiment dampener for the beer company, which may have to raise debt to pay the fine, said brokerage firms.On Friday, India’s competition watchdog found top beer companies United Breweries, Carlsberg India and Anheuser Busch InBev India to have indulged in cartelisation that involved price fixing for over a decade, and fined UB and Carlsberg over ₹870 crore to be paid within two months.

“UBL had cash and cash equivalents of ₹470 crore at the end of FY21. As per our current forecasts, it may have the net cash to pay the penalty of ₹752 crore by end of FY22, or else it may have to raise debt,” Motilal Oswal said in an investor report. The brokerage firm maintained a ‘sell’ rating on UBL’s stock with a 27% downside.

UBL, in a stock exchange notice, said it is reviewing the order in consultation with its legal advisers. Executives of the three beer companies, which control over 90% of the market, exchanged sensitive information and colluded to fix beer prices since 2005, CCI said in its order.

“With still stressed beer sales, UBL would have to shore up further debt. The scenario, if undertaken, is expected to create near and medium term challenges said ICICI Securities.

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